Social Security Disability and Illinois Workers Comp Settlements


Social Security disability and workers comp combined benefits will pay up to 80% of the former monthly income subject to a maximum monthly payment. The general rule is that the combined benefits between Social Security and Workers Compensation cannot exceed 80% of a person’s former monthly income.

Disabled workers can try to maximize the combination of workers compensation benefits and Social Security Disability payments. Workers facing permanent job loss due to injury or total disability should consult a Chicago workers compensation attorney for advice as early as possible.

The workers’ compensation credit against Social Security benefit payments, or the “workers compensation offset” as it is known, is any amount over the 80% combined benefit maximum. Social Security disability benefits are reduced dollar for dollar if the total combined monthly benefits are over 80% of former “average earnings.” The 80% rule is designed to prevent people from making more money staying home on disability than they would have earned by working. Social Security takes a credit for workers compensation payments and sets a maximum cap on the combined benefits.

Social Security defines the former average earnings as a person’s highest monthly earnings either (1) from an average from the highest five years in a row after 1950 or (2) based on a single calendar year of the highest earnings.

This 80% of former monthly income rule effectively caps the maximum amount available from combining both WC and SSD benefits. Social Security disability benefits also have a maximum payment no matter how high the 80% former income figure may be. SSD does not attempt to make sure that an injured worker actually reaches the full 80% of former income level for medium to high wage earners. The low maximum SSD disability payments will usually result in an income loss for disabled wage earners if they are not adequately compensated in workers compensation.

The SSD portion of payments under the 80% combined benefits rule usually changes from when a worker is receiving WC weekly temporary disability payments compared to a different payment amount after the WC case is settled. Workers must ask Social Security for a recalculation of their benefits after the WC case is settled. The SSD monthly benefit can often increase after a settlement.

Stated simply, the monthly SSD benefit and the WC benefit cannot be greater than 80% of the worker’s former income. In practice, if the workers compensation settlement is spread out over the lifetime of the injured worker, it will generally result in a smaller workers' compensation offset. The terms of a WC settlement are extremely important in order to maximize the combined monthly benefits.

Illinois law allows for a single lump sum payment of workers compensation case which can reduce the effects of the Social Security offset. The law allows for a proration or spread of the settlement amount out over the expected lifetime of the worker. Failure to use the proper settlement terms however can result in a complete suspension or termination of SSD benefits up to the entire amount of the settlement.

Chicago Workers Compensation Attorney ----http://wc-chicago.com/ -- 2-01-09