A number of people who are injured at work, find themselves out of work for an extended period of time and wondering whether they can draw benefits through workers’ compensation and social security disability. The short answer is maybe, but it’s complicated.
First, is the issue of eligibility requirements. Generally speaking, it is easier to qualify for “disability” benefits under North Carolina Workers’ Compensation law than it is to meet the Social Security Administration’s definition of disability and other eligibility requirements.
Under North Carolina Workers’ Compensation law, disability means the inability, due to an injury, to earn the wages the employee was making at the time of the injury, in the same or any other employment. An injured worker can prove disability in one of four ways as detailed in Russell v. Lowes Products Distribution, 108 N.C. App. 762, 425 S.E.2d 454 (1993): (assuming that jurisdictional requirements have been met and the employer is bound by the Act)
- An out of work note from an authorized treating physician.
- That the injured worker has work restrictions from the authorized treating physician and has been engaged in a diligent but unsuccessful search for work.
- That the injured worker has restrictions from the authorized treating physician and there is evidence, typically from an expert such as a vocational specialist, that due to some pre-existing condition like the injured worker’s age, inexperience, or lack of education, it would be futile for the injured worker to look for work.
- The injured worker has work restrictions and has found work but at a wage less than what was earned prior to the work injury. (Partial disability)
In essence, under workers’ compensation law, there are multiple ways to prove disability and you can even qualify for partial disability. Moreover, someone can qualify for workers’ compensation benefits even if they are hurt their first day of work on the job. In fact, if they can qualify for workers’ compensation benefits if it is their first day of work ever.
Contrasting these requirements with those of the Social Security Administration, there is an initial requirement that to qualify, a person must have worked and paid into the system five of the ten years before becoming disabled. Then, disability is defined as “the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.” Unlike workers’ compensation benefits in North Carolina, Social Security Disability benefits are not immediately available, are not intended for partial disability claims, and only cover disabilities that are longer in duration.
Suppose a person manages to qualify for both North Carolina Workers’ Compensation benefits and social security disability benefits, what other considerations are there? The first issue is that unless the injured worker was an exceptionally high wage earner, the person will not be able to draw full benefits from both systems. Congress created an “offset” in 1965. A person’s total SSDI and workers’ compensation benefits combined cannot exceed 80% of the person’s average current earnings. Average Current Earnings are based on the highest of the three listed below:
- The average monthly wage used for determining the social security disability benefit
- The average monthly wage based on the person’s five highest-earning years in a row
- The average monthly wage based on the single year that the person’s disability began or any one of the five previous years
Given the “offset”, the majority of people who qualify for both types of benefits don’t draw the full amounts from both systems.
The other challenge as to the “offset” arises when workers’ compensation cases are settled. Many workers’ compensation cases are settled for lump sums. Navigating settlement agreements with lump sums involved, without a qualified attorney representing the injured worker is dangerous indeed. Without specific language in the settlement agreement that satisfies the Social Security Administration’s “pro-ration” requirements, the entire lump sum can be subject to the “offset.” That means the injured worker may not draw any more social disability benefits for years until much of the workers’ compensation lump sum is depleted.
In Part II we’ll explore additional complications involved in the interplay between the workers’ compensation and social security disability systems, including Medicare Set Asides.