Many of the workers’ compensation cases we manage are with people who have stopped working. In many of these cases, the employer and insurance company will attempt to stop paying for benefits in one form or another. One method is by arguing that the individual has retired and no longer qualifies for workers’ compensation. In Pennsylvania, people can continue receiving workers’ compensation benefits and their retirement (SSR, SSD, Pension) under the right circumstances. Understanding these nuances can help prevent you from missing out on the income you deserve after you step out of the workforce.
The most important question a court will consider in one of these cases is whether or not the individual voluntarily removed themselves from the workforce.
Voluntary removal is when someone leaves the workforce, with really no intention of returning. In many cases, voluntary removal can create hurdles for receiving benefits as opposed to when someone stops working when their injuries are so severe, they can no longer continue working in any level of employment.
To determine whether one has voluntarily removed themselves from the workforce in a work-related injury setting, Pennsylvania courts look at indicators or indicia of whether one has so removed themselves to bar receipt of benefits. If it is determined one has voluntarily removed themselves from the workforce, they would be ineligible for future wage loss benefits.
The courts take into account these indicia or considerations to review. This includes:
Although none of the following may be dispositive alone, together your employer or their workers' compensation insurance carrier may use them
to prove you voluntarily removed yourself from the workforce:
If your employer can prove you voluntarily removed yourself from the workforce, they could discontinue your workers’ compensation benefits.
Your benefits may continue after you retire or take a pension if you haven’t "voluntarily removed yourself from the workforce" and other certain conditions are met. These could include:
Under these circumstances, you may continue to receive full or partial workers’ compensation benefits, depending on whether you receive other benefits like a retirement pension or Social Security.
You may receive a pension and/or Social Security at the same time as your workers’ compensation benefits, but these earnings lower your workers’ compensation payments.
Your pension benefits may directly offset your workers’ comp benefits. Under Pennsylvania workers’ compensation laws, your monthly pension value is divided by 4.34, and the result offsets your workers’ compensation benefits on a weekly basis.
Example: You receive $2,500 each month as part of your pension. When divided by 4.34, this becomes $576.03. Because of this, your workers’ compensation benefits are offset by $576.03 each week.
Like pension benefits, your Social Security earnings could significantly offset your workers’ comp benefits, but there is a difference as to whether you receive Social Security Retirement benefits or Social Security Disability Insurance (SSDI) benefits. And the timing of receipt. If you start receiving Social Security Retirement benefits after your injury, your workers’ compensation benefits will be slashed by 50 cents on the dollar of your Social Security Retirement earnings.
To see this in action, pretend you are entitled to $1,500 a month in workers’ comp benefits and you receive $1,200 in Social Security Retirement each month. Fifty percent of $1,200 is $600, so your workers’ compensation benefits would drop from $1,500 to $900 a month.
If you were on Social Security Retirement before the work injury, there should be no offset or reduction of your workers' compensation.
There is an opposite effect on Social Security Disability payments. Workers’ compensation benefits affect Social Security Disability Insurance benefits. The Social Security Administration calculates the combined amounts of your workers’ compensation benefits and your SSDI benefits. Generally, Workers Compensation pays 66 2/3% of your average weekly wage (depending on your earnings, the weekly benefit is calculated differently, e.g., in some cases it is 90%). Thus, your SSDI will be reduced by the amount of Workers Compensation. The Social Security Administration will reduce your SSDI payments so in conjunction with W/C, the total will to bring you to the full rate Social Security would’ve paid absent Workers Compensation. To illustrate, assume you earned $3,000 a month in SSDI. If your workers’ compensation benefits totaled $1,400 per month, your SSDI payments would be reduced to $1,600 so the total combined W/C and SSDI equals the $3,000.
The nuances within voluntary retirement and workers’ comp benefits are tricky. Ensure your benefits are protected with a workers’ comp lawyer who fights for the check you deserve. Contact Dugan & Associates today to continue receiving the benefits you’re entitled to.
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