Workers’ compensation can provide employees with the financial assistance they need to support themselves and focus on their recovery after suffering a work-related injury or illness, but some employees may be worried about how workers’ comp impacts their eligibility for disability benefits. So if you’re asking the question, can I get disability after a workers’ comp settlement? Find out below because receiving a workers’ compensation settlement does not necessarily make you ineligible to receive disability benefits, but it can impact how much you receive.
What is Workers’ Compensation Insurance?
Workers’ compensation insurance provides payment for medical care and lost wages to workers that suffer a work-related injury or illness.
After being injured at work, employees can file a workers’ compensation claim, and if it’s approved, they will receive weekly payments to help them support themselves financially while they focus on recovering and returning to work. Workers that become seriously disabled due to their injuries may also be offered a settlement.
Workers’ compensation insurance also protects employers as, instead of suing employers for lost wages and medical expenses after a work-related injury, employees can simply file a workers’ compensation claim.
What does it cover?
Workers’ compensation covers a variety of expenses that employees may incur following a work-related injury or illness.
- Lost wages
- Medical bills
- Rehabilitation costs
- Long-term medical care
- Disability benefits
- Funeral expenses
Workers’ compensation only applies if employees are injured or become ill due to their jobs. If an employee is forced to take time off from work to recover from a non-work-related injury, they are not eligible to receive workers’ comp benefits.
What is Social Security Disability Insurance?
The Social Security Disability Insurance (SSDI) program is designed to support individuals that become injured or disabled and are unable to work for an extended period of time.
The SSDI program pays benefits to you and certain members of your family if you are insured. To be insured, you need to have worked long enough, recently enough, and paid Social Security taxes on your income.
Can You Get Workers’ Comp & Disability?
Receiving workers’ comp benefits does not make you ineligible for SSDI benefits, though it may decrease your disability payments.
In general, the combined payments you receive from workers’ compensation insurance and SSDI cannot exceed 80% of your normal income before becoming injured. If your benefits do exceed this amount, the Social Security Administration (SSA) will reduce your disability payments to bring the total down to 80% of your average earnings.
If your workers’ compensation benefits run out while you are still collecting SSDI payments, you can notify the SSA about this change to have them reevaluate your SSDI benefits. The SSA will likely readjust your payments to make up for the difference.
Does a Workers’ Comp Settlement Impact Disability Payments?
In some cases, workers may negotiate a lump-sum settlement with the workers’ compensation insurance provider rather than receiving weekly workers’ comp payments. Accepting a lump-sum payment can impact your SSDI payments as the SSA may prorate the settlement amount as if it were paid over multiple weeks.
For example, this means that if you receive $2,000 per week from SSDI, and you accept a workers’ compensation settlement for $20,000, then the SSA may adjust your benefits by $20,000. As a result, you would not receive your $2,000 SSDI payments for 10 months.
In some cases, your attorney may minimize the impact a settlement has on your SSDI benefits by asking the SSA to spread out the adjustment over a lifetime, meaning you would continue to receive your benefits with a small deduction.
It’s important to keep in mind, though, that the entire settlement amount may not be taken into account when adjusting your SSDI payments. The portion of the settlement meant to reimburse you for medical and legal expenses may be excluded when offsetting your SSDI benefits.
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When an employee is injured or becomes ill while at work, they may be eligible for both workers’ compensation and Social Security Disability Insurance benefits. While it is possible to receive benefits through both programs simultaneously, it’s important for employees to understand how accepting a workers’ comp settlement can impact their disability benefits.
At KSA Insurance, we work with businesses in South Carolina and across the southeastern United States to help them find affordable workers’ compensation insurance policies that protect their workers while adhering to their state’s laws and regulations.
Contact us today to get a quote and learn more about whether you can get disability after a workers’ comp settlement.