Ask Larry

Will It Lower My Social Security Payments If I Close My Workers Compensation Case?

Larry.... If I close my workers compensation case while im collecting ss d check. Will it lower my payments with ss. I get 1 check ss d. 1 check workers compensation. If I close my comp case will social security lower my payments. Or will my payments with ss d stay the same? Thank you much.

Hi,

I can't give you a definite answer because the answer to your question depends on a number of different factors, such as which state is paying the workers compensation (WC), and the terms of your WC settlement agreement. You'll need to check with Social Security since they are the only agency that would have access to all of the data needed to be able to answer your question.

Social Security disability (SSDI) benefits can sometimes be partially or fully offset if a person receives state WC benefits or a lump sum payment in lieu of periodic WC payments. The actual offset formula is complex, but the basic rule is that the total amount of a person's Social Security disability (SSDI) benefit plus their WC payment can't exceed 80% of the average amount that the person was earning prior to their injury. If a person receives a lump sum settlement in lieu of periodic payments, Social Security prorates the lump sum to arrive at a monthly rate to be used in the offset calculations. Therefore, you are required to report to Social Security if you receive WC or a lump sum payment, or if there's a change in the amount of your WC payments.

Some states have reverse offset plans that reduce the amount of a person's WC payment if they receive SSDI benefits. In those states, WC benefits don't offset the person's SSDI benefits because the offset is reversed. I don't know whether or not that may be involved in your case, though.

Best, Jerry

Posted: 
Nov 17 2020 - 12:06pm
MaxiFi software running on a laptop
Get What's Yours!
Discover tens of thousands in extra retirement dollars with Maximize My Social Security software!
  • Find your maximized strategy
  • Unlimited what-ifs
  • Step-by-Step filing instructions
  • Our software's lifetime-benefit increase for an illustrative couple earning $65K each and planning to take retirement benefits at 62.

    Results will differ based on your specific case and filing strategy.

Getting Started is Easy
Web-based software. Works on ALL browsers. No download.