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Understanding SSD and Worker's Compensation

Updated: Jan 8

Understanding SSD and Worker's Compensation

Worker’s compensation settlements can have a major impact on SSDI and SSI benefits. Usually, SSDI benefits are not reduced by other benefits you receive or assets you have. SSI benefits are very different, because they are designed to be reduced by any income, benefits, or assets you have. Worker’s compensation settlements are one of the few things that can reduce BOTH SSDI and SSI benefits.

The federal regulations say that your SSDI benefit will be reduced according to a complicated formula. Your SSDI will be reduced by the amount that your workers compensation exceeds the higher of: 

  1.  Eighty percent of your “average current earnings”


  1. The total of your disability insurance benefit (SSDI) and all other benefits based on your earnings record.

First, the SSA will pick whichever of these 2 numbers is larger. Then, your SSDI will be reduced by however much more your workers compensation is than that. The formulas for calculating the offsets are complicated and vary from one case to another. The main takeaway is that the SSA reduces your SSDI by an amount relative to your workers compensation. 

These offset rules can have a major impact on your SSD benefits! When filing for SSD, it is important to keep these rules in mind and be certain to let the SSA know if these benefits change. Contact us at Melinda Brown Law to see if we can help you obtain your SSD benefits! 

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