We recommend to our clients that if they are still unable to work, they have been off for more than a year, and they are no longer receiving temporary disability (the benefit workers' compensation pays you while off work), then apply for State Disability Insurance (SDI) and Social Security Disability Insurance (SSDI).
If a workers' compensation case ends up causing disability that prevents a person from returning to the job market, then Social Security Disability Insurance should be a consideration especially if the injured worker is over 50 years old. Often times age plus the disability will cause a person to not be able to return to the job market.
How Does Permanent Disabiltity Can Overlap Social Security Disability?
If you are getting permanent disability from the workers' compensation insurance company and end up getting Social Security Disability Insurance benefits from Social Security, then there can be credits created between the two. Social Security may attempt to claim a credit for benefits.
How Does A Lump Sum (Compromise and Release) affect Social Security Disability?
If a workers' compensation case is settled and a person receives a lump sum settlement (Compromise and Release) and Social Security Disability Insurance is a possibility or the injured worker is on Social Security Disability Insurance, then a Social Security Addendum (sometimes called a Hartman Formula) should be prepared to demonstrate what parts of the settlement are allocated to permanent disability. Once that allocation is demonstrated, then that permanent disability should be spread the injured workers' life to reduce the potential credits that the Social Security Administration may take based on a lump sum recovery in workers' compensation.
How Does A Lump Sum (Compromise and Release) affect Medicare?
If you are on Social Security Disability and/or you are a Medicare beneficiary, then a Medicare Set-Aside Trust (MSA) would be required before you settle your case by Compromise and Release. The workers' compensation insurance company would obtain a MSA from a company who prepares them. Then that MSA would need to be submitted to CMS (the third-party agency that Medicare uses to address these issues). The MSA company would need all medical records from your workers' compensation case in the last two years, a prescription list from all pharmacies for the last two years, and a Social Security Administration release.
Subsequent Injuries Benefit Trust FundIf you have had a workers' compensation injury that has rendered you unable to work permanently, especially if you are now eligible for Social Security Disability after your work injury, you may have a Subsequent Injuries Benefit Trust Fund (SIBTF) claim.
ConclusionIf you are applying for Social Security Disability, settling your case by Compromise and Release, and/or on Medicare and you don't have an attorney, then we recommend you contact an attorney that specializes in workers' compensation. If you don't have an attorney, contact us.