Please ensure Javascript is enabled for purposes of website accessibility What is workers’ compensation? - Brown & Brown Absence Services Group

An applicant filing for Social Security Disability Insurance (SSDI) benefits because of an injury or illness sustained through employment, may be receiving worker’s compensation payments prior to starting the SSDI applicant process. While applicants should be aware collecting these benefits could impact their SSDI award, it is also important to understand what workers’ compensation benefits are and how they differ from any benefits received through the Social Security Administration (SSA) or a private insurance company.

What is workers’ compensation?
According to Cornell University Law School, workers’ compensation is designed to ensure that employees who become injured or disabled on the job are provided with fixed monetary awards to supplement any loss of income because of their injury or illness, eliminating the need for litigation. Each state has its own workers’ compensation insurance program, with federal employees able to utilize a federal workers’ compensation insurance program if necessary.

How will workers’ compensation affect my SSDI claim?
Some workers who are eligible for SSDI benefits may already be receiving workers’ compensation payments when they begin to apply for SSDI. While it is possible to receive both benefits, typically both benefits cannot be paid in full for the same time. In most instances, SSA will offset the benefits they pay the disabled worker for any workers’ compensation payments received, but, in some states — known as reverse offset states — workers’ compensation will reduce their payments by the amount of the Social Security award.

For Social Security to properly process an SSDI claim, sufficient documentation of workers’ compensation payments may be required. Types of sufficient documentation include an award letter with expected amounts to be paid, a payment history with a breakdown of all payments received, or official settlement documentation from a judge or other mediator if the claim has been settled. When it comes to providing information to Social Security, it is best to do as soon as possible. Without proper documentation, benefits may be delayed or any overpayment assessed.

Due to the long wait times that many SSDI applicants must go through to obtain a favorable decision, it is possible workers’ compensation benefits may end prior to the receipt of an SSDI award. It is important to still provide proof of workers’ compensation payments to Social Security, allowing for any necessary offset of your retroactive lump-sum payment. Brown & Brown Absence Services Group will confirm that Social Security has considered the appropriate amount you receive(d) from workers’ compensation to ensure that the highest amount of money will be paid out to you. Depending on the state in which you live, you may have to provide your workers’ compensation carrier with proof of your Social Security award.

When in doubt, it is best to provide all proof of your workers’ compensation payments — or any other benefits you may have received or are currently receiving through your state, employer, or insurance company — to Social Security as soon as you have it available. This will ensure benefits are processed both timely and accurately. If you need more information regarding workers’ compensation and its impact on your SSDI benefits, please do not hesitate to contact our office or reach out to your local Social Security office for assistance. While we recognize this may be confusing, we hope that by providing you with this information, we can help ease the stress of applying for Social Security Disability benefits.

Nothing in this post is intended as advice or a suggestion to elect or not elect to claim benefits of any kind, including Social Security benefits, nor is it intended as financial advice in any way. The decision to claim benefits is a personal one that is contingent upon each individual’s unique circumstances.