The Short answer is “Yes.”
However, depending upon certain factors, one may not be able to collect his or her Social Security Disability benefit in full. This is because the receipt of weekly workers’ compensation benefits under M.G.L. Chapter 152 can create an “offset” on Social Security Disability (SSD) benefits. In other words, workers comp benefits could cut in to and thereby reduce one’s social security disability benefits. Sometimes, it can eliminate Social Security Disability altogether.
To determine whether or not someone is in an offset situation, you must first determine that person’s high year of income. This is done one of two ways. Either, you would take that persons highest year of income within the 5 years prior to being injured, or you would take the average of his income within the past 20 years; whichever is highest. Let’s say, for example, that an individual were injured in 2011, and between 2006 and 2010, his highest year of income was $42,000
The next step would be do determine 80% of his average current earnings. This is commonly known as the “80% ACE” figure. This is done by simply taking his high year of income ($42,000), and dividing by 12 to get a monthly amount. In this example, this would be $3,500. You would then take 80% of this amount, which would equal $2,800. This is his 80% ACE figure.
The significance of this 80% ACE figure is that it sets the limit on what this individual can receive in both workers’ compensation benefits and social security disability benefits. The two cannot exceed this figure. Once you determine both the individuals high year of income and their 80% ACE figure, it is quite easy to determine if they are in an offset situation or not.
So, in our example, let’s say this individual were receiving weekly workers’ compensation benefits at the rate of $500 per week. This would equal $2,166.65 per month. As mentioned above, the 80% figure is the most he can receive from both benefits. So, to figure out the most he could receive under SSD, you would simply subtract his workers’ comp monthly rate from the 80% ACE cap ($2,800 – $2,166.65). So, the most he could receive from Social Security Disability is $633.35 (even though the person’s full Social Security Disability benefit could have been substantially higher had they not been collecting Workers’ Comp).
If this individual’s full Social Security Disability rate (also known as his Primary Insurance Amount /PIA) were to be, for example, $1,200 per month, than this individual would be in offset. That is because he is not collecting his full PIA. His receipt of workers’ compensation is offsetting and, therefore, reducing his SSD rate.
In some instances, depending upon the circumstances, the individual may be in complete offset. In our example above, if the individual were collecting a weekly comp check of $700 per week, or $3,033.33 per month, this monthly amount would already exceed his 80% ACE figure. He would therefore just collect his workers’ comp benefit in full, and receive nothing from Social Security Disability. This person is in complete offset.
Individuals with higher incomes generally do not have this problem. That is because there 80% ACE figure can be much higher. So, if an individual’s highest year of income were $125,000 per year, this would yield an 80% ACE figure of $8,333.33. Even if that individual were to collect a weekly workers’ comp check at the maximum weekly amount of $1256.47, or $5,444.70 per month, the difference would be ($8,333.33 – $5,444.70) = $2,888.63. Chances are, this amount could be higher than his full PIA, and therefore, he would be able to collect his full PIA, free of offset.
What Then Happens If You Settle Your Workers’ Comp Case? – Please continue to Part 2 of this Blog.
As you can see, the interplay between Workers’ Compensation and Social Security Disability can be somewhat complex. It is important to have an attorney who is experienced in these areas, to ensure that you rights are protected. At Troupe Law Office, we have over 40 years of experience in these fields. Please visit our web site at https://www.troupelawoffice.com for more information. Or, call us at (978) 531-7401. We offer free consultations for all cases.