How Workers’ Compensation Interacts With Social Security Disability
What New York Workers Need to Know About Dual Benefit Eligibility and Offsets
When a serious injury or illness leaves you unable to work, you may be eligible for more than one type of financial support. In New York, injured workers often qualify for both Workers’ Compensation (WC) and Social Security Disability Insurance (SSDI) — two distinct systems with different rules, procedures, and benefits.
But receiving both at the same time can be complicated. Benefit amounts may be reduced, timelines may overlap, and eligibility rules can be confusing, even to the most diligent applicants. If you’re already receiving workers’ comp or thinking about applying for SSD, it’s crucial to understand how these two programs interact and how legal guidance can help you avoid delays, denials, or lost income.
Understanding the Basics: Workers’ Compensation vs. SSDI
Both WC and SSDI are designed to provide income when an injury or medical condition prevents you from working. However, they differ in several key ways:
Workers’ Compensation is a state-run system that provides medical care and wage replacement to employees who suffer job-related injuries or illnesses. It does not require proof of long-term disability, only that your condition is work-related and impairs your ability to work temporarily or permanently.
Social Security Disability Insurance (SSDI) is a federal benefit through the Social Security Administration (SSA). It provides a monthly income to individuals who have paid into the Social Security system and can no longer work due to a long-term or permanent disability, regardless of whether the disability occurred on the job.
Can You Receive Both at the Same Time?
Yes. If you were hurt at work and your medical condition is expected to last a year or more, you may be eligible for both workers’ comp and SSDI. But there’s a catch: receiving both may reduce the amount of your SSDI check due to a rule called the workers’ compensation offset.
The SSA limits the total amount you can receive in combined benefits. If your monthly WC and SSDI payments exceed 80% of your average current earnings before the disability, your SSDI benefits may be reduced accordingly.
How the Workers’ Compensation Offset Works
Let’s say you were earning $5,000 per month before your injury. That means your total combined benefits from SSDI and workers’ comp cannot exceed $4,000 (80% of your average current earnings). If your workers’ comp pays $3,000 a month and your SSDI benefit is supposed to be $2,000, the SSA would reduce your SSDI by $1,000 — so you still receive $4,000 total.
This offset can significantly reduce the SSDI benefit amount. Fortunately, there are strategies to minimize or eliminate the offset, depending on how your workers' compensation settlement is structured.
Structured Settlements and Lifetime Allocations
One of the most effective ways to limit the SSDI offset is through careful planning of your workers’ compensation settlement. The SSA will analyze the terms of your workers’ comp award or settlement to determine how long the payments are intended to last.
If the settlement allocates the total payout over the remainder of your life expectancy, the monthly equivalent becomes smaller — reducing or even eliminating the offset. This is known as a “lifetime proration” or structured settlement, and it must be properly worded and supported by actuarial tables.
Without lifetime allocation language, the SSA may assume the lump sum covers only a short period, which could result in a much higher offset.
Timing of Your Claims Matters
In many cases, workers apply for SSDI after their workers’ comp benefits begin, particularly when it becomes clear that they won’t be able to return to work. However, applying for SSDI can take several months, and most applicants are initially denied.
That’s why it’s often helpful to apply for SSDI as soon as it becomes clear that your condition is long-term. If you're denied, your attorney can help you appeal, and having both claims in motion ensures no unnecessary delays in getting support.
The interaction between WC and SSDI becomes especially important when you:
- Reach maximum medical improvement (MMI) but remain unable to return to work.
- Anticipate settling your workers’ comp case.
- Have multiple injuries or conditions that impact long-term capacity.
Offsets Work Differently for Children and Family Members
If your spouse or child receives dependent benefits through your SSDI claim, those amounts may also be subject to offset rules. The same 80% combined benefit cap applies to the total amount paid to you and your dependents.
For example, if you receive $3,500 in WC benefits and your average current earnings were $4,000, your dependents’ SSDI benefits could be reduced or eliminated to stay within the limit.
When Does Workers’ Comp End and SSDI Continue?
Workers’ comp benefits in New York may last for several years, depending on the nature of your injury and how your disability is classified (temporary, permanent partial, or permanent total). SSDI benefits, on the other hand, continue as long as you remain disabled under SSA rules.
In some cases, workers receive workers’ comp initially and then transition to SSDI once their benefits expire or they settle the case. However, both programs may be available concurrently, and transitioning must be carefully managed to avoid gaps in income.
Do Workers’ Comp Settlements Affect SSDI Eligibility?
A workers’ compensation settlement does not automatically disqualify you from SSDI. However, how the settlement is structured — including language regarding the injury, proration periods, and legal fees — will impact how the SSA calculates any offset.
The SSA closely scrutinizes settlement agreements and may impose a reduction if they’re not worded correctly. That’s why working with an experienced New York workers’ comp attorney who understands SSDI offset language is so important.
Legal Guidance Can Maximize the Benefits You Deserve
Trying to manage both systems on your own can be overwhelming, and even one misstep could cost you thousands in lost benefits. The attorneys at Pasternack Tilker Ziegler Walsh Stanton & Romano LLP have helped thousands of injured New Yorkers navigate workers’ compensation and Social Security Disability claims.
We know how to:
- Coordinate your WC and SSDI applications
- Strategically time your claims
- Minimize offsets through proper settlement planning
- Appeal denied SSDI claims or WC disputes
- Fight for the full compensation you're entitled to under New York law and federal guidelines
Whether you’re still working, just starting the claims process, or facing an unexpected denial, our legal team is ready to help you make informed decisions and protect your income for the long term.
Contact Us Today to Review Your Workers’ Comp and SSD Options
If you were seriously injured on the job and can no longer work, you may be entitled to both workers’ compensation and Social Security Disability benefits. But coordinating those claims takes strategy and experience. Contact Pasternack Tilker Ziegler Walsh Stanton & Romano LLP today for a free consultation. Let us help you secure the maximum compensation and peace of mind you deserve.
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