A person who has been injured or has become ill at work can obtain disability benefits after a workers' comp settlement. However, they need to prove that a health condition has affected their ability to work and that they are unable to perform their duties for at least one year.
Disability payments are often made by the Social Security Administration (SSA), so they are completely different from workers' compensation benefits. However, certain programs limit the amount people can get if they have other sources of income. Therefore, a previous settlement may reduce how much employees can be awarded for a disabling condition.
Below is more information about the disability benefits that an injured worker may be entitled to and whether they can obtain this remuneration after agreeing on a workers' compensation settlement.
What Is Social Security Disability Insurance?
Social Security Disability Insurance is the largest disability benefit program in the United States, surpassing workers' compensation in size. These benefits cover long-term impairments that arise on or off the job but prevent injured parties from returning to work.
Federal laws state that Social Security disability benefits can only be paid to workers who cannot engage in a "substantial gainful" activity due to their physical or mental impairment if it can last more than one year or result in death.
Whether people can get these benefits or not depends on the severity of the impartment. They're only awarded to those who have sustained a disabling injury that is so severe that they are unable to do their previous work or engage in another type of substantial gainful activity. Schuerger Shunnarah Trial Attorneys can explain exactly what you can not do while on workers comp.
Are Workers' Compensation and Social Security Insurance the Same Thing?
People who have sustained an injury or become ill at work are legally entitled to get compensation through the workers' comp program. However, when this health condition is disabling, they may have the legal right to obtain Social Security disability benefits.
Both programs are different. While workers' compensation benefits may be available to employees who are injured while on duty, Social Security disability payments are provided to people who cannot return to work even if their injuries didn't occur in the workplace.
Additionally, employees are eligible for workers' comp benefits from the first day of employment. However, this is different when it comes to Social Security disability insurance, as it only covers those with a substantial work history and often begins after a 5-month waiting period.
Understanding What a Workers' Comp Settlement Is
A person who is injured or becomes ill while performing work tasks isn't allowed to handle the case through the personal injury system but should file a workers' comp claim.
In Tennessee, employers are required to purchase workers' compensation insurance, which typically covers medical treatment expenses and lost wages.
Under certain circumstances, it pays for other damages if employees' injuries are disabling or require amputation. They're known as:
Temporary total disability benefits, which are paid while the injured employee recovers away from work
Permanent disability benefits, which are paid if the health condition that affected the employee's life has lasting consequences
After suffering an injury at work, people can file a claim with their workers' comp insurer. These companies may start paying benefits or, in some cases, offer a settlement to resolve it.
When it comes to workers' compensation, injured workers can choose between the following options:
Lump sum settlement, which means they get a single payment as compensation
Structured settlement, which splits the compensation into several small payments over time
Final lump sum settlement when injured employees have reached their maximum medical improvement (MMI)
Will an Injured Employee Get Disability Benefits After a Workers' Compensation Settlement?
Essentially, a worker who accepted a workers' comp settlement, whether they chose a lump sum payment or the structured option, is entitled to a Social Security disability benefit as long as they are eligible. However, this won't happen automatically.
Injured employees who want to get disability insurance benefits must apply and meet the required qualifications for the program that is appropriate for their situation.
Types of Disability Benefits
These are the options available in these cases:
Social Security Disability Programs
Offered by the federal government, these are the largest and most common benefit programs.
Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) are provided to people who cannot work due to a medical condition. These are the potential payments:
Up to $3,627 per month through SSDI for people who have worked and paid taxes for at least 10 full years
Up to $914 per month for people who have not worked much or at all and have income needs below $1,000
VA Disability Benefits
People who are currently serving or have served in the military may be eligible for benefits granted by the Department of Veterans Affairs (VA). However, their injury or illness must be linked to their time in service to qualify.
Private Disability Insurance Plans
These are the benefits that people buy from private companies. Through their employers, workers have access to firms that offer short-term and long-term disability insurance plans.
In these cases, injured workers can file a claim with these insurance companies to recover compensation for their health condition. Payments usually account for between 40% and 60% of their former paychecks.
Unless employees pay into a private disability insurance plan, the SSDI, SSI, and public disability benefits are the best options for obtaining compensation.
Will a Workers' Comp Settlement Affect Injured Workers' Disability Pay?
More often than not, workers' compensation settlements affect disability benefits, reducing the amount that injured employees can get. Here's more information about this:
How Workers' Comp Settlements Affect SSI Benefits
A person who comes to a settlement agreement with a workers' comp insurer may not qualify for SSI benefits in some cases since the criteria to be eligible establishes that people must earn less than $1,000 in monthly income and have less than $2,000 in savings or other assets, including property, or $3,000 if married.
However, regular checks from workers' compensation settlements will likely exceed that limit, especially when employees choose lump sum payments.
How Workers' Comp Settlements Affect SSDI Benefits
According to the 1965 Social Security Amendments, disability insurance benefits must be reduced when an injured worker is also eligible for workers' compensation. The combined amount shouldn't exceed 80% of the employee's average current income.
However, after combining both payments, the resulting sum cannot be less than the amount of total Social Security disability benefits before the reduction.
The SSA defines "average current earnings" as the highest of the following:
The average monthly income from covered employment, including self-employment, during the highest five consecutive years before 1950
The average monthly wage that defines the disability primary insurance amount (unindexed)
The average monthly earnings in the calendar year with the highest gains from covered employment during the five years, ending on the date when the disability began
Average current earnings are determined based on total earnings, which also includes the Social Security taxable maximum. This offset provision is intended to ensure that benefits from workers' compensation and SSDI are not excessive.
However, the math is trickier when injured employees receive lump sum settlements. Some checks contain information about how much beneficiaries' workers' compensation is worth on a monthly basis.
If these details are not included, the SSA must break down the settlement based on the injured employee's life expectancy and the resulting total settlement amount minus medical costs and lawyer fees.
After the SSA defines how much the worker's settlement is worth on a monthly basis, that amount is used to determine whether benefits are below the 80% income threshold when combined with SSDI payments.
Other Types of Payments and Compensation That May Affect Disability Benefits
Besides workers' compensation, other payments may affect injured workers' SSDI benefits, as the SSA also applies the 80% limit to the following:
Civil service disability benefits
Short-term disability benefits
State or local government disability-based retirement benefits
However, some payments do not affect SSDI benefits, including SSDI, VA disability, and private disability benefits.
Do Injured Workers Need Help from an Experienced Attorney?
The laws governing workers' compensation are complex and can vary from state to state. Although imposed at the federal level, limits and rules set by the SSA for disability benefits are also intricate. Therefore, injured employees who want to seek compensation for their health condition should speak with an experienced Nashville work injury attorney.
Workers' comp attorneys understand this legal system and can guide injured people through the process of filing a claim or negotiating a settlement and applying for disability benefits.
Additionally, seasoned attorneys will offer the information that employees need to choose the best settlement option according to their case, if this is the best option, appeal denials if they decide to file a claim, and more.
Contact Schuerger Shunnarah Trial Attorneys Today!
Injured employees have the legal right to recover compensation through the workers' comp system, especially if they suffer an impairment and lose their ability to work. Schuerger Shunnarah Trial Attorneys can also advise on other questions like Is Light Duty considered lost time?
However, it's important to work with a knowledgeable attorney to handle this process so that this compensation does not affect potential disability benefits.
At Schuerger Shunnarah Trial Attorneys, we offer the advice injured workers need to make better decisions. Contact us today!