How Workers' Compensation Benefits Interact With Social Security Disability
You can collect Missouri workers' compensation and Social Security Disability Insurance at the same time. The catch is that federal law caps what the two programs pay you together. When the combined amount crosses that cap, Social Security cuts your SSDI check, not your workers' comp check.
That cap, the workers' compensation offset, surprises a lot of injured workers, usually right after they sign a lump-sum settlement.
Before you sign anything, our Franklin County personal injury lawyer can tell you what a settlement will do to the disability income you count on.
Key Takeaways
Combined workers' comp and SSDI cannot exceed 80 percent of your pre-disability earnings. The excess comes out of SSDI, and Missouri does not reduce workers' comp in return.
A lump-sum settlement does not end the offset; the weekly rate written into the settlement decides how long the reduction lasts.
Attorney fees and documented medical costs come off first. The offset ends at full retirement age.
Can You Receive Missouri Workers' Compensation and SSDI at the Same Time?
Yes. Workers' compensation under Chapter 287 RSMo pays for an injury that happened at work. SSDI pays because you cannot do substantial work at all, whatever the cause. Nothing in Missouri law stops you from drawing both.
The limit comes from the federal side. Under SSA Handbook section 504, your SSDI and any family benefits on your record can be reduced so the total of SSDI and workers' comp stays at or below 80 percent of your average current earnings before disability. Missouri is not a reverse-offset state, so your weekly workers' comp check stays the same.
How Social Security Calculates the Offset
Everything turns on your average current earnings, or ACE. Social Security figures it three ways and keeps the highest: the average monthly wage behind your SSDI, your single best calendar year, or your five highest consecutive years. Then it takes 80 percent.
SSA compares that figure with your total family benefit, meaning your SSDI plus anything your spouse or children draw on your record. The higher one is your limit. If workers' comp plus SSDI tops it, SSDI drops by the difference.
Where people get hurt is the earnings record. A missing year or late-reported wages lower your ACE and deepen the cut. We check the record against your W-2s before anything is signed.
What the Offset Looks Like in Dollars
Suppose your ACE comes out to $4,500 a month. Eighty percent of that is $3,600. You draw $3,000 a month in Missouri workers' comp and qualify for $1,900 in SSDI.
Monthly figure | Amount |
|---|---|
SSDI before offset | $1,900 |
Workers' compensation | $3,000 |
Combined benefits | $4,900 |
Applicable limit (80% of ACE) | $3,600 |
SSDI reduction | $1,300 |
SSDI after offset | $600 |
Your workers' comp stays at $3,000. Your SSDI check shrinks to $600. If your children draw benefits on your record, their payments can be reduced too.
How a Lump-Sum Settlement Changes the Math
A settlement does not make the offset go away. Social Security treats a lump sum as if it were still being paid weekly and keeps reducing your SSDI until that stream runs dry.
In Missouri, every compromise settlement goes on a Stipulation for Compromise Settlement approved by an administrative law judge or the Commission under RSMo 287.390, and the weekly rate on that form is the one Social Security reaches for first.
Take a $90,000 settlement with $22,500 in attorney fees. At a weekly rate of $692, SSA divides the net $67,500 by $692 and gets roughly 97 weeks. Nearly two years of reduced SSDI.
Missouri has allowed permanent partial and permanent total settlements to be prorated over the worker's life expectancy since 1998. Spread that same $90,000 over 30 years and the weekly figure is about $58. At that rate the offset can shrink to nothing.
SSA's Missouri workers' compensation instructions direct the agency to use the proration method most favorable to you, but only from language in the original approved settlement. Missouri judges usually put the proration rate on an addendum page. Prepared the same day, it counts. Added later to dodge the offset, it gets ignored. Get the proration right before the stipulation is signed.
What Comes Off the Top Before the Offset
Not every dollar of a settlement counts. SSA subtracts documented costs before it prorates what's left:
Attorney fees approved by the judge, capped at 25 percent in Missouri.
Medical bills you paid or still owe for the work injury.
A reasonable estimate of future medical treatment.
Case costs such as records, depositions, and witness fees.
Anything Medicare or another insurer already reimbursed cannot be subtracted twice, and SSA will want receipts, fee agreements, and a written medical estimate. Keeping consistent medical treatment records does double duty here, supporting both the disability claim and the exclusion.
If part of your recovery came from Missouri's Second Injury Fund, expect SSA to count it. When the carrier and the Fund each pay a lump sum, SSA combines them. The lone exception is the $40 weekly physical rehabilitation payment, which stays out of the calculation.
When the Offset Ends
The reduction stops when workers' comp payments stop, when SSA finishes prorating your lump sum, or when you reach full retirement age and SSDI becomes a retirement benefit. Missouri does not cut workers' comp for Social Security retirement, so from then on you keep both in full.
Medicare Has a Say in Your Settlement Too
SSDI recipients qualify for Medicare after 24 months. If your settlement closes out future medical care, Medicare expects part of it set aside for injury-related treatment through a Medicare Set-Aside Arrangement. CMS reviews set-asides when you are already on Medicare and the settlement exceeds $25,000, or when you expect Medicare within 30 months and it exceeds $250,000. Review is voluntary. Protecting Medicare's interest is not.
How to Protect Both Benefits
Get the proration language into the stipulation before the judge signs it. Ask SSA in writing how it computed your ACE, and keep every payment notice, award letter, and receipt. Report the settlement, too. Social Security's own guidance requires you to tell the agency when workers' comp starts, changes, or stops. If the offset is figured wrong, you have 60 days to request reconsideration.
If someone other than your employer caused the injury, money recovered through third-party workplace injury claims is not workers' compensation, and SSA does not offset it. How personal injury settlements are calculated and the five-year statute of limitations on those claims matter alongside the comp case.
Talk to Us Before You Sign
A settlement that looks good on paper can cost you SSDI for years. We don't want that to happen to you.
Daniel Briegel, Kevin Whiteley, and William P. Moon have tried more than 50 jury cases in mid-Missouri, and our firm represents injured people throughout Franklin County.
Contact us for a free consultation about your workplace injury and what a settlement would mean for your disability benefits.
