If you are getting worker’s compensation time loss under your Washington State Department of Labor and Industries claim, and you also start to get federal Social Security Disability benefits, or Social Security Retirement benefits, you probably will be subject to an offset.
Unfortunately, injured workers do not get to keep the full value of time loss and social security in most cases. The benefits under the programs are added up and “capped.” The government does this so people do not make more on disability than they made while working. It also saves the government money.
Generally, the Department of Labor and Industries takes the offset, meaning, it reduces an injured worker’s time loss payments. The exception is when the worker is between 62 and 65 years of age – during this period, the Social Security Administration takes the offset (i.e., reduces the worker’s benefits), and L&I pays the full amount of time loss. So, if you are under 62 years of age, you will get your full SSD benefit but your L&I time loss may be reduced. Once you hit 62, your SSD will go down, but your L&I time loss should go up to make up for it. Then, at 65, your SSD will go back up, and your L&I payment will go back down, but overall, your total benefit should remain the same.
There are a few points to keep in mind.
An injured worker is better off getting benefits from both L&I and Social Security, so do not be deterred. Apply for Social Security Disability if you are on time loss. You will come out ahead.
Generally, the amount of the offset depends on your “highest year’s earnings” in the five years before your inability to work started. Workers are entitled to at least 80 percent of this “highest year” figure. To make the math easy, let’s say a worker made $120,000 a year in her best year. Divide the year’s earnings by 12 months, and it makes $10,000 a month. 80 percent of this amount is $8,000 per month.
Now, assume the monthly L&I time loss payment before the offset is $6000 a month. Social Security Disability eventually begins, and the SSD payment is $2500 a month. The worker will receive $2500 from Social Security, but L&I will now drop to $5,500, for an overall combined benefit of $8,000. This example works if you are under 62 or over 65. Between 62 and 65, Social Security will drop and L&I will pick up the difference.
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