Can You Collect Workers' Comp and Social Security Disability at the Same Time?

Many seriously injured workers qualify for both workers' compensation and Social Security Disability Insurance (SSDI). Yes, you can receive both — but there's an important "offset" rule that reduces one when you're receiving the other. Understanding how this works can save you thousands of dollars.

The Workers' Comp / SSDI Offset Rule

Federal law limits the combined amount you can receive from workers' comp and SSDI to 80% of your "average current earnings" before you became disabled. If your combined benefits exceed this 80% threshold, Social Security reduces your SSDI payment by the excess amount. This is called the "reverse offset" and applies in most states.

Reverse Offset States

Some states have enacted "reverse offset" laws, where the workers' comp payment is reduced rather than the SSDI payment when the combined benefits exceed the threshold. These states include California, Colorado, Montana, New Jersey, New York, North Dakota, Ohio, Oregon, Washington, and Wisconsin. This distinction can significantly affect your strategy for structuring a workers' comp settlement.

Structuring Your Workers' Comp Settlement to Protect SSDI

How your workers' comp settlement is structured — particularly how it's allocated over time — directly affects the SSDI offset calculation. A lump sum settlement can be structured to minimize the offset by: spreading the settlement over your expected work life rather than taking it as a single lump sum, clearly allocating portions to medical expenses (which don't count toward the offset), and coordinating the settlement language with your SSDI application. This requires careful coordination between a workers' comp attorney and a Social Security attorney.

Applying for SSDI During a Workers' Comp Claim

You can apply for SSDI while your workers' comp claim is ongoing. In fact, applying early is important because SSDI approvals take 6 months to 2 years. The 5-month waiting period for SSDI means the earlier you apply, the sooner benefits begin. Your workers' comp medical records can support your SSDI application.

Medicare Set-Asides When Collecting SSDI

If you're on SSDI and settling a workers' comp claim, Medicare has an interest in your settlement because Medicare-eligible individuals (SSDI recipients become Medicare-eligible after 24 months) cannot use Medicare for work-injury-related treatment unless a Medicare Set-Aside (MSA) account is established. Failing to address this properly can result in Medicare denying future treatment. An attorney experienced with both workers' comp and Medicare requirements is essential.