If you’re experiencing a work-related illness or injury, you might be eligible for both workers’ compensation and social security disability benefits. However, chances are, you won't be able to receive full benefits from both at the same time. The following guide will help you in determining how much compensation you can expect so that you can budget for a successful recovery.

How Does Social Security Affect Workers Compensation?

If your social security benefits and workers’ compensation together are more than 80% of your average earnings when you were working full-time, social security benefits will be reduced in order for you to continue receiving workers’ compensation. This process is called offsetting.

How Is the Offset Calculated?

The rules for calculating the offset will vary from state to state. Generally, social security will determine your applicable limit, which is the total combined benefits that federal law allows you to receive each month. If your combined benefits are over the one month limit, social security will offset your benefits to bring them down to the limit. Typically, these offsets prove more common in those who earned lower salaries because their limits are more easily exceeded due to combined benefits.

What Are Ways to Reduce the Offset?

There are a few common ways to reduce your offset. For example, you might opt for a lump sum payment from your workers’ compensation during a settlement agreement. You will have to make your intentions clear while spreading out the payment over the months. Then, your lawyer might create a settlement that excludes medical and legal expenses from workers’ compensation, so social security won't include them while calculating your offset. 

Alternatively, you might change your social security benefits to retirement benefits to remove the need for an offset. Your social security benefits will be lower but won't affect your workers’ compensation. However, this option only makes sense for those who are closer to retirement age.

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