What’s the Difference Between Workers’ Compensation and SSDI?
When you suffer a serious, life-changing injury at work, you may find yourself considering both workers’ compensation and Social Security Disability Insurance (SSDI). When your injury results in permanent disability, you need to be able to collect the benefits you are entitled to. But should you collect workers’ compensation or SSDI benefits? The answer to that depends on your injury and your degree of disability. It also depends on whether you can obtain approval for SSDI benefits. In some cases, you may be able to collect both.
Unfortunately, collecting the benefits you need after a serious and disabling injury is not easy. That is why so many injured Arkansas workers turn to Rainwater, Holt & Sexton to help them after suffering a significant work-related injury. Our Arkansas SSDI lawyers can help you through the process of getting both worker’s compensation benefits and SSDI benefits if you qualify. We can also represent you through the appeals process to ensure that you get the money you need to move forward in life after suffering a disability. Call us today to start reviewing all your legal options.
Understand the Differences in Workers’ Compensation and SSDI?
There is a difference between workers’ compensation benefits and SSDI benefits. Understanding those differences is the first step towards getting the help you need.
Workers’ compensation benefits are available to you when you become injured on the job. They cover medical expenses, as well as a portion of lost wages. All employees in Arkansas are required to carry workers’ compensation for their employees. You can collect these benefits without the need to prove fault. The only qualification for obtaining workers’ compensation benefits is that your injury occurred in the course of your job or because of your job.
Social Security Disability Insurance, however, is available to anyone with a qualifying disability, regardless if they suffered an injury on the job or not. However, it is considerably more difficult to collect SSDI. In order to receive SSDI benefits, you must be significantly disabled and unable to work in any capacity for your employer for at least a year. You must also have a qualifying disability. Not everyone with a disability will qualify for SSDI benefits. In fact, 68 percent of first-time applicants receive a denial.
How Does a Workers’ Compensation Settlement Affect SSDI?
In some cases, you can collect both worker’s compensation benefits and SSDI benefits. For example, suppose you slipped off of a ladder at work and fractured your spine. You are unable to work and are dealing with significant disability and long-term impairment. At first, you will automatically qualify for workers’ compensation benefits. These benefits will pay your medical expenses and a portion of your lost wages. You must then determine if your spinal injury will result in impairment for at least a year. If your doctor believes that your disability will last for at least a year, then you can begin applying for SSDI. You can collect both SSDI and workers’ compensation until you return to work, reach maximum medical improvement, or you reach retirement age when disability benefits switch to retirement benefits.
It is important to know, however, that collecting both benefits will reduce the amount of each benefit you can receive. You can only collect up to 80 percent of the total SSA estimates your average current earnings to be. If the combined benefits from workers’ compensation and SSDI are more than 80 percent of the total, your SSDI benefits are reduced.
For example: Before you suffered a disability, you earned $4,000 a month. You and your family would be eligible to receive $2,200 in SSDI benefits a month. If you also receive $2,000 a month in workers’ comp benefits, your SSDI benefits would need to be reduced. You can only receive $3,200 a month in combined benefits, which is 80 percent of your pre-disability monthly income.
The SSA uses different formulas to determine your average current earnings depending on your circumstances. That is why it is important to have an experienced and skilled Arkansas SSDI attorney on your side from the start.
Lump Sum Payments and Settlements
There are times when employees choose to receive a lump payment from their employers, rather than collect monthly workers’ compensation benefits. When this happens, the SSA will offset SSDI benefits to account for this lump sum payment. To do this, they will convert the lump sum payment into a monthly benefit for the purposes of calculating out a reduction in SSDI benefits. One of the ways they do this is by dividing the lump sum by the workers’ compensation payments the worker was receiving. They then apply the SSDI offset for those months.
For example: Suppose you received $1,200 in workers’ compensation payments for your spinal cord injury. You agree to a lump sum settlement with your employer for $12,000. The SSA may determine that you have received 10 months of payments. Your SSDI benefits will then be reduced for those 10 months.
There are ways to minimize the SSDI offset by drafting structured settlement agreements specifically. For example, your attorney may specify in the agreement that you are collecting $100 per month for the next 120 months. Your attorney may also specify that the lump payment excludes medical and legal expenses.
This is why it is so important to work with an attorney throughout the legal process. This way you can collect the maximum benefits to which you are entitled after suffering a disability. Without an attorney, you may not collect the money you need to pay for your expenses and medical care after suffering a serious and disabling injury at work.
What is Better: Workers’ Compensation or SSDI?
In many cases, it is best to collect workers’ compensation benefits as soon as you become injured on the job. Even if you are thinking about applying for other benefits, workers’ compensation benefits can get you the money you need quickly. In addition, you do not pay taxes on those benefits. You will need to pay taxes on SSDI benefits, as well as unemployment.
However, if your disability is expected to last over a year, applying for additional benefits through SSA may be best. Your attorney can help you determine if workers’ compensation or SSDI benefits are best for you. With legal assistance you can rest assured knowing you are getting the money you need.
Contact Our Arkansas Workers’ Comp Attorneys
If you suffered a disability because of a work-related injury, you may be able to collect both workers’ compensation and SSDI benefits. We can help you file the disability claims you need and prevent mistakes from occurring that could jeopardize your claim. We can also structure any workers’ compensation settlements to help you obtain maximum compensation.