Can You Get Both Social Security Disability & Workers' Compensation in Virginia?
Posted: Friday, July 28, 2006
by jervalaw
Law Office of Jerry Lutkenhaus
You are disabled and you are on Workers' Compensation in Virginia for your work place injury and you want to also obtain Social Security Disability for this injury. This article addresses whether this is possible.
Social Security Disability is a Federal program that provides a monthly income to disabled people (1) who have paid into the Social Security system while working and (2) who have proven they are disabled and unable to work. The amount of monthly income is dependent upon earnings paid in by the worker in the years prior to the disability with the maximum benefit a disabled worker could receive in 2006 being $2,053.00 per month. The worker's dependents could receive an additional 50% of his amount.
The Offset: In 1965 Congress passed an amendment to Social Security enacting the Social Security Offset. Since 1965, Social Security will reduce its benefit if a combination of the Social Security benefit and the Workers' Compensation benefit exceeds 80% of the worker's average current earnings. Social Security calculates the average monthly earnings based on the best year of employment in the five years preceding the onset of the worker's disability.
An Example of an Offset: The following example shows how this works: John Doe receives a monthly workers' compensation benefit of $3,000.00. John Doe then qualifies for Social Security and would receive $1,500.00 a month based on his earnings record with Social Security. Social Security calculates John Doe's average earnings based on his best year in the last five years prior to his disability as $5,000.00 per month. However, the combination of John Doe's Social Security and Workers' Compensation equals $4,500.00 ($3,000.00 plus $1,500.00) and 80% of his average earnings is only $4,000.00 ($5,000.00 x 80%). Thus, John Doe exceeds the 80% cap by $500.00 and his Social Security would be reduced to $1,000.00 per month ($4,500.00 - $4,000.00). If John Doe had dependents, they could have received 50% of his $1,500.00 Social Security amount as their dependent check. However, due to the receipt of Workers' Compensation the dependents would not receive anything.
What About A Settlement to Escape the Offset? John Doe cannot easily escape the offset by doing a lump sum settlement of his Workers' Compensation Claim. Normally, if John Doe does a lump sum settlement of his Workers' Compensation Claim, the settlement will still be subject to the offset. Social Security will prorate the settlement to reflect the monthly rate that would have been paid had the lump-sum award not been made. Medical and legal expenses incurred by the worker may be excluded when computing the offset. For example, if John Doe settles his workers' compensation claim for $100,000.00, Social Security will divide this $100,000.00 by fit by $3,000.00 (his monthly workers' compensation benefit, pre-settlement) and continue the offset for over 33 more months ($100,000.00 divided by $3,000.00). An experienced Workers Compensation/Social Security lawyer may be able to avoid this offset.
In summary, like tax planning to avoid additional taxes, a worker who is receiving both Workers' Compensation and Social Security Disability, must do careful planning to avoid a reduction of his benefits for both himself and his dependents. This is especially true if the worker does a lump sum Workers' Compensation settlement. If the worker is not careful, the worker may face a reduction of his Social Security Disability for both himself and his dependents for a long time. In the above example John Doe had an offset for another 33 months because he did a settlement without consulting an experienced attorney. In order to find an experienced attorney check the followng article: Virginia Workers Compensation Lawyer: Finding the best one.
This may be considered AN ADVERTISEMENT or Advertising Material under the Rules of Professional Conduct governing lawyers in Virginia. This note is designed for general information only. The information presented in this note should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.
Copyright© 2006, Gerald G. Lutkenhaus. ALL RIGHTS RESERVED
Jerry Lutkenhaus is a practitioner of Social Security Disability & Workers' Compensation law in the Richmond, Virginia area for over 30 years He was given an "AV" rating by Martindale Hubbell in 2003. For more information, see our websites at http://www.geraldlutkenhaus.com and http://www.virginiadisabilitylawyer.com . You can call Jerry Lutkenhaus now for a free consultation at 804-358-4766.
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