Workers compensation offers lots of benefits to employees who qualify, including medical care, physical rehab and disability pay. If your on-the-job injury left you permanently unable to work, you may also be entitled to a disability or retirement pension. The effect of applying for a pension when you're already getting workers' comp depends in part on who offers the pension and the state in which you live.
It's perfectly legal to apply for Social Security disability if you're already on workers' comp. There is, however, a limit as to how much you can receive by combining them. The most you can receive is 80 percent of your pre-disability wages. That's a better deal than it sounds, as you don't pay income tax on workers' comp. You may have to pay tax on your Social Security disability, but that depends on your total income and your filing status.
If you're lucky enough to have a job that offers disability pensions, talk to your human resources department about the effect on your workers' comp if you apply. If you're in the federal retirement system, for instance, you have to choose one or the other -- you can't receive both. Los Angeles firefighters and police officers can apply for disability pensions, but if they get one, they have to pay back all their workers' comp disability income.
State law also affects what happens with your workers' compensation. In Pennsylvania, for example, if you apply for Social Security retirement benefits, your employer's workers' comp provider can apply to cut those benefits by 50 percent of your Social Security income. Furthermore, the workers' comp insurer can argue in court that if you're taking Social Security or an employer's pension, it means you've retired -- and as you're no longer in the workforce, you no longer deserve workers' comp.
Before you apply for an early pension, do your research to fully understand your state's law and your employer's policy regarding the combining of a pension and workers' comp. Do some number crunching, too. If you have to choose between a pension and workers' comp, determine which one offers the best deal. If you think your employer or the company insurer is paying out less than you're entitled to receive, talk to an attorney. Workers' comp cases are complicated, and you'll need expert help.
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