Workers' Compensation & State Disability Insurance
Updated: August 13, 2022
We recommend to our clients that if they are still unable to work, they've have been off more than a year, and they are no longer receiving temporary disability (benefit workers' compensation pays you while off work), then apply for State Disability Insurance (SDI) and Social Security Disability Insurance (SSDI)
State Disability Insurance (SDI)
Most people that worked in California before their work injury have money that has been set-aside (pay check should show the deduction under the name of SDI). This benefit is NOT to be confused with Social Security Disability Insurance (SSDI) which is a Federal benefit through the Social Security Administration. State Disability Insurance (SDI) can be utilized by any person who has withheld this benefit who applies for the benefit, applies for it at EDD, is certified by a doctor (not just a worker's compensation doctor...any doctor), and is approved by EDD for the benefit.
Some workers do not withhold SDI; usually those are people who work for state and local governments that have a special contract with the EDD. If you find that you aren't eligible for SDI, you should check with your Human Resources department to determine their arrangements for temporary off-work benefits when workers' compensation benefits are not available.
How Does State Disability Insurance (SDI) affect Workers' Compensation?
Temporary Disability - In most cases, you cannot collect temporary disability and State Disability Insurance at the same time. You should check with EDD on the amount of your temporary disability benefit from workers' compensation and ask them if you are entitled to benefits.
Permanent Disability - If you are getting permanent disability from the workers' compensation insurance company, then EDD will reduce your benefit by the amount of permanent disability you are getting from workers' compensation.
What do I do when EDD denies my claim?
If EDD denies your claim and the reason for the denial is that you are receiving workers' compensation, therefore, you are not eligible for SDI, then that may or may not be accurate. If you are receiving temporary disability, then that may be accurate. If you are not receiving temporary disability and you are not working, then take the letter from the workers' compensation insurance company that indicated your benefits are ending and show it to EDD. You should take immediate action and an appeal may be required.
If EDD denies your claim and the reason for the denial is that you have not been working within the last year or two, therefore, you are not eligible for SDI or your benefit is greatly reduced, then that most likely isn't accurate. You should take immediate action and an appeal may be required. EDD will rely on a rule that indicates that your benefit is based on the last year or two of work and if you have been off for a workers' compensation injury, you may wouldn't have been withholding SDI benefits. Therefore, you need to appeal their decision and use an exception to the rule that includes people who are off for a work injury.
What should you take from this? If you have been off work long enough from a workers' compensation injury and you are looking or receiving State Disability Insurance and you don't have an attorney, then we recommend you contact an attorney that specializes in workers' compensation.