How Workers’ Compensation Affects Your Social Security Benefits in Vermont
Workers’ compensation insurance is designed to help employees who suffer injuries or become sick while on the job. After an employee is injured or becomes ill due to their job, workers’ compensation benefits can provide them with wage replacement, medical care, and other assistance. However, if you are receiving both workers’ compensation and Social Security benefits, workers’ compensation can impact how much you receive from Social Security. This article explores how workers’ compensation can affect your Social Security benefits in Vermont.
Understanding Workers’ Compensation
In the United States of America, states mandate that employers have workers’ compensation insurance, which is meant to provide benefits to employees when they are injured or become ill due to their jobs. In Vermont, all employers must have workers’ compensation insurance. Under Vermont law, when an employee in Vermont becomes sick or suffers an injury on the job, they may be entitled to one or more of the following benefits;
- Reasonable and necessary medical care/treatment
- Wage replacement if the employee cannot work due to their injury
- Rehabilitation costs if the employee cannot return to suitable employment
- Permanent impairment if the injury results in lasting or irreversible damage
If an employee dies due to a work injury or illness, their family may be entitled to death benefits.
Understanding Social Security Benefits
The federal government provides Social Security benefits to assist people who cannot work due to a severe, long-term disability. These benefits provide a safety net for disabled individuals who can’t engage in substantial gainful activity. Individuals qualify for Social Security Disability Benefits/Insurance (SSDI) by working for a certain number of years and paying into the Social Security System. The amount of Social Security benefits a person receives depends on their average lifetime earnings.
What Happens When You Receive Both Workers’ Compensation and Social Security Benefits
Suppose you suffered a work-related injury or illness and are receiving workers’ compensation while at the same time receiving SSDI benefits. In that case, your workers’ compensation payments may affect your SSDI benefits. Your Social Security benefits may be reduced if the combined workers’ compensation and SSDI benefits exceed 80% of your average current earnings (ACE). The ACE is calculated based on your average earnings over a certain period before you became disabled.
Consider the example below;
Suppose your average earnings were $4,000/month before your injury or illness. In such a case, the total you can receive from workers’ compensation and SSDI combined is limited to $3,200 (80% of $4,000). If you receive $2,000 monthly in workers’ compensation, your SSDI benefits would be reduced to $1,200 to keep the total at $3,200. Your SSDI benefits will be reduced until your workers’ compensation benefits stop or the month you reach your full retirement age, whichever comes first.
Talk to an Attorney
Dealing with workers’ compensation and Social Security benefits is complicated. It is helpful to speak to a qualified attorney. An experienced attorney can help you structure your workers’ compensation settlement to reduce the offset and maximize how much you get to retain.
Contact a Vermont Workers’ Compensation Attorney
If you have questions about how workers’ compensation may impact your Social Security benefits or need help filing a workers’ compensation claim, contact a Vermont workers’ compensation attorney at Sluka Law PLC today.
Source:
ssa.gov/pubs/EN-05-10018.pdf
