If you’re receiving Social Security disability benefits in Oregon and you also qualify for workers’ compensation, it’s important to understand how these two benefit systems interact. The Social Security Administration (SSA) has rules in place to prevent what they call “double dipping,” which means receiving wage replacement benefits from more than one source for the same period of disability. Navigating these rules can be complex, but understanding them is crucial to ensuring you get the full benefits you deserve. This article will explain how the offset works, how to reduce its impact, and why consulting an experienced attorney can make a significant difference in your financial well-being.
How Oregon Compares to the National Average on Social Security
Less than half of applications in Oregon are approved on the first try. The state has a reputation for a thorough and sometimes lengthy review process that can be both an advantage and a challenge. The average time to receive an initial decision in Oregon in 2021 was 5.5 months, and the average time for reconsideration was 4.9 months. The wait time for a hearing date depends on the SSA hearing office, and can range from 9 months to a year.
It’s particularly important for Oregon residents to provide documentation of their disability. This thorough documentation can help ensure your application is processed more smoothly and increases your chances of approval.
Understanding the Offset: Preventing Double Dipping
When you receive both Social Security disability benefits and workers’ compensation benefits, the SSA will reduce your disability benefits to account for the workers’ compensation payments. This is known as the offset. The SSA wants to ensure that the total amount you receive from both sources doesn’t exceed 80% of your average earnings before you became disabled. If it does, the SSA uses the offset against your SSA benefits.
For example, let’s say you receive $1,500 per month in temporary total disability benefits from workers’ compensation and $1,200 per month in Social Security disability benefits. The SSA considers both these amounts as “disability” benefits, so an offset will be needed.
Assume your average monthly earnings before your disability were $3,000 per month. The SSA ensures your total benefits from both sources do not exceed 80% of your previous earnings, which is $2,400 (80% of $3,000). In this case, your combined benefits from workers’ compensation and Social Security are $2,700, which exceeds the $2,400 limit. Therefore, the SSA would reduce your Social Security benefits by $300 to keep the total at $2,400. So, instead of receiving $1,200 from Social Security, you would receive $900, and your total would remain at the allowed limit.
How the Offset is Calculated
The SSA looks at your highest year of earnings within the five years before your disability began. This amount is known as your AIME, or average indexed monthly earnings. This figure is used to calculate 80% of your pre-disability earnings. They combine your monthly Social Security disability benefits and your workers’ compensation benefits and apply the 80% rule. If the total amount of your combined benefits exceeds 80% of your average current earnings, the SSA will reduce your Social Security disability benefits by the excess amount. This reduction continues until you reach retirement age, your workers’ compensation benefits stop, or the offset no longer applies because your combined benefits fall below the 80% threshold.
Reducing the Impact of the Offset
To minimize the reduction in your Social Security disability benefits, you can structure your workers’ compensation settlement to spread payments over your lifetime. This involves including specific language in the settlement agreement that prorates the total amount over many years.
For example, if you receive a $60,000 settlement it can be divided into smaller monthly payments. This proration means the SSA will only consider a smaller monthly amount when calculating the offset, leading to a minor monthly reduction in your Social Security benefits rather than a significant immediate cut. This approach helps maintain more consistent and manageable monthly income.
Steps to Take After a Workers’ Compensation Claim
If you’re dealing with a workers’ compensation claim and considering applying for Social Security disability benefits, it’s important to get legal advice early in the process. An attorney experienced in Social Security disability can help you understand your rights and ensure your claims are handled quickly and correctly. You should keep detailed records of your medical treatments, work history, and any communications with insurance companies or employers, and work with your attorney to ensure that the workers’ compensation settlement is structured to minimize the Social Security offset.
How Drew L. Johnson, P.C. Attorneys At Law Can Help
Workers’ compensation and Social Security disability benefits are complex systems. They can feel overwhelming, especially when you’re dealing with a disability. Our experienced social security attorney can provide assistance by:
- Explaining Your Rights: We can help you understand your legal rights and options, so you’re informed throughout the process.
- Filing Claims and Appeals: We can handle the paperwork and ensure that your claims are filed correctly and on time. If your claim is denied, we can assist with the appeals process.
- Negotiating Settlements: We can negotiate on your behalf to ensure that the terms of your workers’ compensation settlement are fair, and that they include language to mitigate the Social Security offset.
Call Us for a Free Consultation
If you have an Oregon Workers’ Compensation claim and are considering applying for Social Security disability benefits, it’s important to understand how these benefits will interact. At Drew L. Johnson, P.C. Attorneys At Law, we are dedicated to helping you receive the benefits you deserve. Our experienced team will work to maximize your benefits and support you through this process.
Contact us today at (541) 434-6466 for a free consultation. Let us help you with your claim and ensure you get the support you need. Call now to learn more about how we can help.
