DI 52101.001 Introduction to Workers’ Compensation/Public Disability Benefit (WC/PDB) Offset Provisions
Soc. Sec. Act, Section 224(a),
20 CFR § 404.408
Workers’ compensation (WC) provides benefits to workers who are injured on the job or have a work-related illness. A public disability benefit (PDB) is a disability benefit required by a law or plan of a Federal, State, or local governmental entity.
Workers injured on the job may qualify for Social Security disability insurance benefits (DIB) in addition to benefits received under Federal and State WC/PDB programs. However, the Act requires that SSA reduce Social Security DIB when the worker is also eligible for periodic or lump sum WC/PDB benefits so that the combined amount of WC/PDB and Social Security DIB do not exceed 80 percent of the worker’s average current earnings.
The DIB is not reduced if the State WC/PDB law or plan provides for a reverse offset (a reduction of the WC/PDB benefit to a worker also receiving Social Security DI benefits).
A. Offset provisions
Social Security disability benefits may be reduced or totally offset if the disabled worker is also entitled to:
Offset does not apply if the disabled worker is a disabled widow(er) or a disabled adult child.
NOTE: For WC/PDB offset purposes, “State” includes the District of Columbia, American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands.
1. When offset is applied
Apply offset when total benefits payable to the worker and any entitled auxiliaries, plus WC/PDB exceed the higher of:
The combined WC/PDB and Social Security DIB payments (after the reduction) can never be less than the amount of the total Social Security disability payments before the reduction. The reduction continues until the month the worker reaches age 65 (or age 62 in pre-1981 Amendment cases) or the month the WC/PDB payment stops, whichever occurs first.
NOTE: Full retirement age (FRA) does not apply to the WC/PDB offset provisions. WC/PDB offset ends at age 65.
2. When offset stops
Reduction of Social Security DIB for receipt of WC/PDB stops when:
the NH is no longer disabled
Social Security DIB terminate
the NH’s benefits are suspended for SGA
lump sum proration ends
periodic WC/PDB ends
WC/PDB offset does not apply due to a recognized reverse offset plan per DI 52110.001
a high ACE (average current earnings) precludes offset (due to a triennial redetermination or a reduction in the workers compensation benefit)
NH elects reduced retirement insurance benefits (RIB). See DI 52150.030 for information
3. Order of offset
If any benefits are payable after offset is applied, they are paid to the NH first.
If the amount payable after offset exceeds the NH’s benefit, the excess is distributed proportionately to any auxiliaries.
Offset is the reduction in SSA benefits to a NH and/or entitled auxiliaries when the total of the benefits plus WC/PDB exceeds the limit provided in the Social Security Act. WC, PDB, or both can cause offset.
NOTE: Social Security DIB and WC/PDB do not have to be based on the same injury or illness for offset to apply.
2. Workers’ Compensation (WC)
WC is a temporary or permanent payment made under a Federal or State law to an worker because of a work related injury, illness or disease.
a. Sources of WC payments
b. Types of WC payments
WC is usually paid weekly, every two weeks (or per pay period), twice a month, monthly, every 4 weeks (or every 28 days) or in a lump sum.
Temporary payments are payments made while a decision is pending on the amount of the permanent award. Temporary payments are usually short term and paid to cover lost wages for work injuries. It does not mean a permanent award is or will be paid.
Temporary Total (TT) payments – worker is totally disabled now but may medically recover to return to work.
Temporary Partial (TP) payments – worker returns to work on a “light duty” basis before reaching maximum medical improvement.
Permanent payments are payments made where no further medical improvements are expected.
Permanent Partial (PP) payments – worker has a permanent loss of, or loss of use of, one or more body parts, each of which has a legally determined number of weeks of WC payments that the disabled worker is entitled to receive. PP payments may be paid based on a scheduled maximum number of weeks for the specific body loss or based on a percentage loss of the whole body or loss of earning capacity.
Permanent Total (PT) payments – worker sustained an impairment, which permanently removes the person from the work force.
Disfigurement payments are payments made due to a permanent injury, usually to the head, face, or neck, which impedes the progress of finding future employment.
Second Injury Fund or subsequent injury payments are WC payments made by specific funds created by State law, which are in addition to the WC payments made by the employer.
NOTE: For detailed information about the types of WC payments, see DI 52120.001C.
3. Public Disability Benefit (PDB)
PDB is a periodic benefit paid under a Federal, State or local law or plan to a worker with a temporary or permanent disability. PDB does not have to be based on a work-related injury or illness. Workers receiving a PDB do not necessarily have to have been employees of the public entity paying or requiring the benefit.
4. State WC definitions
See WC glossary in DI 52120.001.I. – Introduction to State Specific Workers’ Compensation (WC) Procedures, WC glossary.
C. Listing Codes
Listing codes are used to identify and collect WC/PDB offset cases. POMS instructions and other national instructions explain when to use a listing code. Field offices (FOs) and processing centers (PCs) input the listing code through the Processing Center Action Control System (PCACS).
WC/PDB Offset Listing Code
POMS (DI) Reference
WC/PDB Lump Sum Prorated Based on Life Expectancy