Under Federal law, the Social Security Administration is entitled to reduce your Social Security Disability benefits for workers' compensation benefits you receive, but this is not a dollar-for-dollar offset.
To calculate the reduction in Social Security Disability benefits that may result from an award of workers' compensation benefits, you need to contact your local Social Security office to get two numbers: your ACE (Average Current Earnings) and your PIA (Primary Insurance Amount).
Your combined entitlement to workers' compensation benefits and Social Security Disability benefits is not supposed to exceed 80 percent of your ACE. Your PIA is the maximum you are entitled to receive in disability benefits.
For example, let's assume you have an ACE of $2,300.00, a PIA of $1,500.00, and you have been awarded workers' compensation benefits of $500.00 per week. Your monthly workers' compensation benefits equals $2,166.67 (workers' compensation benefits $500.00 weekly times 52 weeks equals $26,000.00 divided by 12 months equals $2,166.67). Because 80 percent of your ACE is $1,760.00, there would be a complete offset of your Social Security Disability benefits and you would not receive any Social Security Disability benefits while you continue to receive worker's compensation benefits of $500.00 weekly.
Let's suppose instead that your ACE was $4,000.00 per week, your PIA was $2,200.00, and you have again been awarded $500.00 in workers' compensation benefits.
In this instance, 80 percent of your Average Current Earnings equals $3,200.00. You are receiving $2,166.67 in monthly workers' compensation benefits, and thus you would be entitled to additional benefits of $1,033.33 in Social Security Disability benefits (80 percent of $4,000.00 equals $3,200.00 minus monthly workers'' compensation benefits $2,166.67 equals $1,033.33).
You are obviously not receiving the maximum that you would be entitled to receive under the Social Security Act if you weren't receiving workers' compensation benefits, but you're earning more than you would get if you qualified only for Social Security Disability benefits or only for workers' compensation benefits.
For more information from the Social Security Administration, click here.