Workers’ compensation and Social Security Disability Insurance are two government programs that are designed for similar purposes, but work in quite different ways. Both are intended to help people who are unable to return to work because of an injury or illness, and many people who start off collecting workers’ compensation benefits later apply for Social Security Disability benefits. However, if you think you can double your money by collecting benefits from both programs, you will be disappointed.
In this blog post, we’ll take a brief look at the two types of programs and how they interact.
Workers’ compensation in Indiana
Most workers in Indiana are covered by the state’s workers’ compensation program. There are also federal programs that cover employees of the federal government.
Workers’ compensation is meant to pay for the medical care of employees who are injured while on the job or who are made ill due to an occupational illness. For employees who need longer to recover from their injuries or illnesses, workers’ compensation can also pay benefits based on a percentage of their wages (up to a maximum amount) until they are able to return to work.
For those who are considered permanently disabled, Indiana workers’ compensation can pay benefits up to 500 weeks, or about nine-and-a-half years.
Workers’ compensation can also pay benefits to surviving family members of an employee who was killed in an accident on the job.
Social Security Disability
Social Security Disability Insurance is a federal program that provides income for people who are unable to work because an injury, illness or other condition has left them disabled.
Social Security Disability benefits don’t come through the applicant’s employer, and the applicant’s condition doesn’t have to be work-related. However, the applicant must have worked a sufficient number of hours in the previous 10 years in order to be eligible for Social Security Disability benefits.
Generally, Social Security Disability benefits continue until the applicant is able to return to work, until they die or until they reach retirement age, at which time the Social Security Disability benefits become retirement benefits.
Combining the two
Technically, one can collect both workers’ compensation benefits and Social Security Disability benefits at the same time. However, the person’s total benefits will be offset, giving them a maximum of 80% of the wages they earned before they became disabled.
Now, imagine that Adam has been working for 20 years when he is badly injured in a workplace accident. Because the accident happened at work, he is eligible for workers’ compensation benefits. Because he is unable to return to work at all, he is considered totally disabled. Workers’ compensation benefits provide him with income to replace his lost wages. The dollar amount of these benefits is based on a percentage of his pre-injury wages, so he receives about 70% of what he made before the accident.
The years go by and Adam is still unable to earn a living by working, but his workers’ compensation benefits are set to expire. He applies for Social Security Disability, and is accepted. However, he cannot collect more than 80% of his pre-injury wages, and so at most, the Social Security Disability benefits can give him an additional 10% until his workers’ compensation expires. At that time, the offset will end and he may be able to collect more from Social Security Disability.