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Understanding How Worker's Compensation and Social Security Disability Interact

When you're dealing with a worker's compensation case that also involves social security disability, it's best to work with a firm that understands how the two interact. It's important to understand that social security benefits work on a federal level and worker's compensation works on a state level. Like any other state, Florida has its own rules and regulations on how the two offset or reduce one another.

Your benefits cannot exceed 80 percent of your average weekly earnings

Florida Statutory Authority states that a worker's weekly compensation benefits in addition to any other benefits received cannot exceed 80% of their average weekly wages. Reduction of compensation benefits doesn't apply to benefits payable to an injured worker the week after reaching the age of 62. No reduction to your benefits will occur until the Social Security Administration determines the amount and you begin receiving these payments.

The offset

Regarding an offset, your employer has to prove that they are rightfully entitled to it. If you're receiving Temporary Total Disability, Temporary Partial Disability, or Permanent Total Disability, your employer or carrier can take an offset. The courts once ruled that an offset could not be retroactively accomplished, but only when the carrier or employer determined you were receiving your benefits. Now the courts have ruled that a carrier may recoup up to 20% of overpayment from your biweekly payment of benefits.

The cap

Regarding the 80% cap on the social security offset, Hyatt v. Larson Dairy proved that the legislature is determined to include supplemental income in the total amount of benefits received by a claimant. Hyatt claimed that the social security offset should be calculated without Permanent Total Disability. For this 1991 case, the court ended up being in favor of the judge's calculations.

The calculation

A later case in 1996, Hunt v. D.M. Stratton Jr. created a method by which your offset can be more easily calculated. First, calculate 80% of the average current earnings and 80% of the average weekly wage and take the greater of the two. This is what will be used for calculations. The next part of the process is to determine how much in benefits the claimant receives every week without the offset. Then calculate the difference between the latter figure and the former figure. If this preliminary offset number is greater than the social security benefits, then this is the maximum offset allowed.

The reduction

The reduction is calculated by determining the total amount of social security benefits being paid to you and your family members. This number is added to your worker's compensation and any other public disability payment. If this total is greater than 80% of your average earnings currently, the excess amount will be taken from your social security benefits.

In the event that social security disability and worker's compensation are payable to you, your offset will not decrease your benefits below 80% of your average weekly wage. SSD benefits can be offset, but only to the extent that your total benefits are not reduced to less that 100% of your average weekly wage or 80% of your average monthly earnings, whichever is larger. For example, if 100% of your weekly wage is greater than 80% of your monthly income, your benefits cannot be reduced below 100% of your weekly wage (the larger number).

Your SSD is not affected by insurance benefits, private pensions, or private sources. However, it is affected by worker's compensation and public disability benefits. If the public disability payment is issued by a local, state, or federal government for a medical condition, this may affect your social security benefits. Examples of the benefits that affect your SSD are state temporary disability, civil service disability, and local or state retirement. Examples of benefits that do not affect your SSD are Veteran's Administration benefits, state and local government benefits, as well as Supplemental Security Income.

Lump sum payments

It's important to note that if you receive a lump sum payment from worker's compensation or another disability payment instead of a monthly benefit, this could affect the amount of social security benefits you and your family receive. Also worth noting is that claimants have attempted to get offset recalculations done to adjust to the cost of living to no avail.

Ultimately, your disability benefits will be reduced if you're also the recipient of worker's compensation or any other public plan within the U.S. or your state. Florida is one of only a few states that is subject to a reverse offset. A reverse offset is in order if you are the recipient of both types of benefits. The law regarding reverse offsets in Florida is detailed and it's helpful to have a professional help navigate you when understanding the law regarding your benefits. You want to ensure that you're receiving the fair amount that you're due while also making sure that any reductions you receive are appropriate.

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