You suffered a severe head injury at your Worcester construction job last summer. The workers' compensation benefits help cover your immediate medical bills, but the monthly payments fall short of what you need to support your family. Your doctor says you may never return to work due to the extent of your injuries, so you start to wonder if you can and should apply for Social Security Disability Insurance (SSDI).
At Keefe Disability Law, our Boston Social Security disability lawyers can explain how different disability programs work together. The relationship between workers' compensation and SSDI can affect your total monthly benefits, making it essential to understand the rules before applying.
Federal Offset Rules for Dual Disability Benefits
You can receive both workers' compensation and Social Security Disability Insurance benefits simultaneously in Massachusetts. However, federal law requires that your combined monthly payments cannot exceed 80 percent of your average earnings before you became disabled. Social Security reduces your SSDI payments through an offset when your total benefits exceed this threshold.
The Social Security Administration calculates your average current earnings using your highest-paid five consecutive years during the 15 years before you became disabled. For example, if your average monthly earnings were $4,000 and you receive $1,800 in workers' compensation benefits, your combined benefits cannot exceed $3,200. If Social Security would’ve normally paid you $1,600 in SSDI, they would reduce this amount to $1,400 to stay within the 80% limit.
The offset only applies to Social Security Disability Insurance, not Supplemental Security Income (SSI). Workers' compensation payments count as unearned income for SSI purposes, which can otherwise reduce or eliminate your SSI benefits. Massachusetts workers' compensation law allows permanent total disability benefits equal to two-thirds of your average weekly wage, plus annual cost-of-living adjustments (COLA).
How Workers' Compensation Strengthens Your SSDI Claim
Receiving workers' compensation benefits can actually help your Social Security disability application. The workers' compensation system has already determined that your injury prevents you from performing your job duties. This finding supports your argument that you cannot work at substantial gainful activity levels.
Workers' compensation medical records provide detailed documentation of your condition and limitations. These records often include residual functional capacity (RFC) evaluations, treatment notes, and specialist reports that Social Security needs to evaluate your disability claim. Your workers' compensation case has likely generated medical evidence that directly supports your SSDI application.
Strategic Timing for Dual Applications
You should apply for Social Security disability as soon as your doctor determines that your condition will prevent you from working for at least 12 months. This ensures you don't miss potential benefits during the application process. Social Security has a five-month waiting period before SSDI benefits begin, but this waiting period runs from your disability onset date, not your application date.
Some Massachusetts workers wait until their workers' compensation case settles before applying for SSDI. This approach can backfire because lump-sum settlements affect Social Security offset calculations differently than weekly benefits. Social Security spreads lump-sum settlements over your life expectancy for offset purposes, which can create larger reductions in your SSDI benefits.
Health Insurance Coordination Considerations
Both workers’ compensation benefits and Social Security Disability Insurance can provide health insurance coverage with different coordination rules.
Workers' compensation in Massachusetts must cover all medical treatment related to your work injury for as long as necessary. SSDI beneficiaries become eligible for Medicare after receiving disability benefits for 24 months.
Medicare becomes the primary insurance for non-work-related medical conditions, while workers' compensation remains primary for injury-related treatment. If you're considering a settlement, federal law requires workers' compensation Medicare set-aside (WCMSA) arrangements to protect future injury-related medical coverage.
Planning for Benefit Transitions
Massachusetts workers' compensation benefits don't continue indefinitely in most cases. Temporary total disability benefits continue until you can return to work or reach maximum medical improvement. Your SSDI benefits can continue as long as you remain disabled and are unable to work at substantial gainful activity levels.
Planning for the transition when workers' compensation benefits end is essential. If your SSDI benefits are currently reduced due to the offset, they will increase when workers' compensation stops.
Picture a factory worker from New Bedford who received workers' compensation for three years after a severe back injury on the job. The offset reduced his SSDI benefits from $1,400 to $900 per month. When workers' compensation ended, his full SSDI benefits resumed, providing stable long-term income.
