Yes, an injured worker can receive both workers compensation benefits and social security disability benefits, but there is an offset of the workers comp benefits in Wisconsin. In some states, the SSD is reduced not the workers comp, but every state has a reduction of one or the other. Under Wisconsin Statutes Sec. 102.44, workers comp benefits are reduced when the combined worker’s compensation and Social Security Disability Income (SSDI) benefits exceed 80% of the employee’s average current earnings (ACE) as determined by the Social Security Administration. This ACE calculation is recalculated upward on January 1 of the third year following entitlement to SSDI and every three years thereafter. Indexing greatly diminishes the offset and typically eliminates it after six to nine years.
The Social Security benefit used in the calculation (that is, the amount to be subtracted from 80% of the ACE to determine the net worker’s compensation benefit) is the benefit on the date of the employee’s initial entitlement to SSDI. Later cost-of-living adjustments and benefits payable to dependents are ignored. Wis. Stat. § 102.44(5)(b), (f). Attorney fees and costs under chapter 102 are netted out before the offset is calculated. See Wis. Stat. § 102.44(5)(a). If an employee elects to receive Social Security retirement benefits at age 62, the offset ceases. Otherwise, the offset continues until the employee reaches normal retirement age.
The law requires the injured worker to sign an authorization releasing SSDI information to the workers’ compensation insurance company. If found out later, a retroactive application of the offset and a deduction in workers compensation for any overpayments that have been made. The amount of the overpayments is subtracted from future benefits.
Temporary total disability benefits are not reduced by SSDI paid while the employee is in retraining.
It should be noted that the SSD standard of disability is not the same as workers compensation. They are two separate systems with different standards of proof. Also, the SSD disability may be based on other injuries or conditions apart from the work-related disability in the workers compensation claim.
At McCormick Law Office in Milwaukee, Wisconsin we regularly represent an injured workers in their worker’s compensation claim and their social security disability claim. Every case is different, sometimes it is best to hold off going for SSD until a workers comp lump sum settlement is made as this avoids the reverse offset of workers comp benefits by SSD. In other cases, the person needs the SSD to survive until the workers comp claim is resolved. It is important that the attorney and injured worker be able to coordinate the two cases so the injured worker’s net recovery is the highest settlement possible.