When Can You Get Social Security Disability After a Workers’ Comp Settlement?

When Can You Get Social Security Disability After a Workers’ Comp Settlement?

If you have been injured on the job, you may be able to get social security disability after a workers’ comp settlement. If you meet the requirements for Social Security disability, you may receive compensation, even if you have received a Workers’ Comp settlement. However, your Workers’ Comp settlement must be less than 80% of your average current earnings, as calculated by the Social Security Administration.

woman worker feeling pain in ankle after work accident social security disability after workers' comp settlement

A Workers’ Compensation settlement amount can affect the Social Security disability benefits you receive. If the Workers’ Comp settlement amount is high, your benefits Social Security Disability award could be reduced. The Social Security Administration carefully reviews Workers’ Compensation settlement agreements.

The Difference Between Workers’ Comp Settlements and Social Security Disability

There are two main programs that can help you financially recover if you suffer a work-related injury: workers’ compensation and disability benefits. Both provide financial assistance to cover your medical bills and living expenses. However, they are not the same and are used in different situations. As an injured worker, it is important to know the difference between these two programs.

What Is Workers’ Compensation?

When a worker is injured on the job or has a work-related illness, he or she is entitled to benefits under the Workers’ Compensation program. In Illinois, it is mandatory for employers to carry Workers’ Compensation insurance. For a successful workers’ comp claim, the worker must have suffered an injury while on the job. The compensation he or she receives covers his or her medical expenses and wage replacement. Workers who negotiate settlements through Workers’ Compensation will either receive a monthly payment or a lump sum. The programs are designed and managed by individual states, which means that they can vary in terms of who provides insurance, the kinds of injuries or illnesses that are compensable, and the level of benefits. Employers must obtain insurance or prove that they have the financial ability to carry their own risk in accordance with state laws.

What Is Social Security Disability?

Social Security Disability Insurance (SSDI) is a program where workers earn coverage for benefits by paying Social Security taxes on their earnings. The program provides benefits to disabled workers and their dependents. For those who can no longer work due to a disability, SSDI offers a way to replace some of their lost income.

Differences Between Workers’ Comp and Social Security Disability

While Workers’ Compensation and Social Security disability benefits are the two largest disability benefit programs in the United States, they are quite different:

  • Workers are eligible for Workers’ Compensation benefits from their first day of employment, but Social Security disability benefits are only paid to workers who have a substantial work history. Social Security disability benefits begin after a 5-month waiting period.
  • Workers’ Compensation benefits are intended to help workers recover from their injuries, while Social Security provides benefits for individuals who are permanently disabled and unable to work.
  • Workers’ Compensation benefits only cover disabilities that arise out of and in the course of employment. Social Security disability benefits are paid only to workers who have long-term impairments that prohibit any gainful work, regardless of whether the disability arose on or off the job.
  • Workers’ Compensation provides benefits for both short-term and long-term disabilities, as well as partial and total disabilities. Social Security doesn’t provide temporary or partial disability benefits. Its benefits are paid only to workers who are unable to engage in substantial gainful activity due to a medically determinable physical or mental impairment that is expected to last at least a year or result in death.

Can You Get Social Security Disability After a Workers’ Comp Settlement?

In considering – can you get workers’ comp and disability? — The answer is yes. If you are disabled and meet the eligibility criteria for Social Security disability benefits, you may receive both. However, your disability benefits may be reduced by the Social Security Administration if the combined amount of your workers’ comp benefits and disability benefits exceeds a certain threshold.

Who Is Eligible for SSDI Benefits?

To qualify for Social Security Disability Insurance (SSDI) benefits, there are two main criteria that must be met. First, you must have been employed in jobs that are covered by Social Security. Second, you must have a medical condition that meets the strict definition of disability as determined by Social Security.

In addition to meeting the disability criteria, you must have worked for enough time under Social Security to be eligible for disability benefits. This is calculated using a work credits system. The number of work credits required to qualify for disability benefits depends on your age at the onset of your disability. Typically, you need to have earned 40 credits, with 20 of these earned within the last 10 years leading up to the year in which your disability begins.

Younger workers may be eligible with fewer credits. Social Security work credits are calculated based on your total yearly wages or income earned through self-employment, with a maximum of 4 credits awarded for each year. The amount of wages that you need to earn, to qualify for a work credit, changes from year to year. While this may seem complicated, a social security disability lawyer can help you to determine whether you meet these criteria.

The definition of disability under Social Security is specific to this program and differs from other programs. It provides compensation solely for total disability, without any benefits payable for partial disability or short-term disability. According to the rules set out by the Social Security Agency, you are considered to have a qualifying disability if:

  • Your medical condition prevents you from engaging in substantial gainful activity (SGA) or working.
  • You are unable to perform the work you previously did or adapt to other types of work due to your medical condition.
  • Your medical condition is expected to last for at least one year or result in death.

If you have enough work to qualify for disability benefits, the Social Security Administration (SSA) evaluates whether you meet certain criteria to qualify. There are 5 questions to determine if you have a qualifying disability:

Are You Working?

If you are working and your earnings average more than $1,470 per month in 2023, you generally cannot be considered to have a qualifying disability. However, if you are not working or your earnings are below this amount, your application will be sent to the Disability Determination Services (DDS) office for a medical decision. The DDS uses several questions to evaluate your medical condition.

Is Your Condition Severe?

First, your condition must significantly limit your ability to perform basic work-related activities, such as lifting, standing, walking, sitting, or remembering, for at least 12 months. If it does not, you do not have a qualifying disability.

If your condition does interfere with basic work-related activities, the next question will be considered.

Is Your Condition Found on the List of Disabling Conditions?

Your medical condition will be compared with a list of medical conditions severe enough to prevent you from doing SGA for each major body system. If your condition is not on the list, it must be as severe as one that is on the list to qualify as a disability. If it is not, then the DDS will move on to the next question.

Can You Do the Work You Did Previously?

The DDS will then evaluate whether your medical condition prevents you from performing any of your past work. If you can still perform your past work, you will not be considered to have a qualifying disability. If you cannot perform your past work, the next question will be asked.

Can You Do Any Other Type of Work?

Your age, education, work experience, and transferable skills will be taken into account when considering whether you can do other work. If you cannot do other work, you will qualify for disability benefits. If you can do other work, your claim will be denied.

How Does a Workers’ Comp Settlement Affect SSDI Benefits?

You may be wondering – how much is the Social Security disability benefit payable to a covered worker? Your monthly SSDI benefits, which also include benefits for your family members, are combined with any workers’ compensation or other public disability payment you may receive. If the total amount of these benefits exceeds 80% of your average current earnings, the excess amount is deducted from your Social Security benefit.

For instance, let’s assume that before you became disabled, you earned an average of $4,000 per month. You, your spouse, and your two children could be eligible to receive a total of $2,200 in Social Security disability benefits every month. Additionally, you receive $2,000 every month from workers’ compensation.

However, since the total amount of benefits you would receive ($4,200) is higher than 80% ($3,200) of your average current earnings ($4,000), your family’s Social Security benefits will be reduced by $1,000 ($4,200 – $3,200).

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David W. Martay

David W. Martay, a partner at Martay Law Office in Chicago, IL, is a top-rated workers’ compensation lawyer who represents injured employees throughout the state. Known as a highly-skilled advocate for his clients, David has recovered millions for victims of workplace accidents.

Years of Experience: More than 25 years
Illinois Registration Status: Active

Bar Admissions: Illinois State Bar Association

author-bio-image author-bio-image
David W. Martay

David W. Martay, a partner at Martay Law Office in Chicago, IL, is a top-rated workers’ compensation lawyer who represents injured employees throughout the state. Known as a highly-skilled advocate for his clients, David has recovered millions for victims of workplace accidents.

Years of Experience: More than 25 years
Illinois Registration Status: Active

Bar Admissions: Illinois State Bar Association