An injured employee who does not expect to be able to return to work may consider retiring if he or she is of sufficient age or has worked for a specified number of years. However, retiring while receiving workers' compensation payments may jeopardize your claim.
If you are unsure if you can retire and still receive workers' compensation, you should continue reading this article to gain a better understanding of retirement and workers’ comp benefits. Alternatively, you may also hire a workers’ compensation attorney to assist you with your claims.
How Much Do I Receive From My Workers’ Compensation?
The actual amount of workers' compensation payments you receive is based on a number of factors, including your state's regulations, the type of injuries you sustained, and your pre-injury income.
For the minimum amount, most states pay approximately two-thirds of your average pre-injury wages for temporary disability benefits. However, the maximum temporary disability compensation you may receive varies from state to state and from year to year. During your treatment for your injuries, temporary disability benefits are meant to replace a portion of your income.
A complicated formula based on state laws is typically used to calculate your compensation under permanent disability benefits. Additionally, factors such as what portion of your body is injured and the severity of that injury are also taken into account.
To learn about the process for filing a claim and the eligibility requirements for workers’ comp benefits, you may visit your state’s compensation department website.
How Does Retirement Affect Your Workers’ Compensation Benefits?
There are a lot of considerations at play when it comes to retirement and receiving workers’ compensation benefits. In most cases, you may still be eligible to collect workers’ comp benefits while in retirement. However, there are certain nuances to this rule, including:
Voluntary and Involuntary Retirement.
You will be unable to receive workers’ compensation benefits if you choose to retire despite already getting approval for your workers’ comp claim. This means that regardless of the severity of your work-related injury, once you voluntarily retire, you will stop receiving workers’ comp benefits. However, if your retirement was forced (involuntary retirement) because of the severity of your injury, you are still eligible to collect workers’ compensation benefits. To learn more about how long can workers’ comp cover you, visit Disability Help.
Receiving Social Security Disability (SSDI) benefits.
The amount you receive from workers’ compensation benefits will be reduced if you are receiving SSDI. This is because workers’ comp is considered an income replacement program for disabled or injured employees who did not qualify for SSDI. For every dollar you receive in SSDI payments, the compensation you receive for your work-related injuries will be decreased or offset by one dollar.
Retirement Funds From Pensions.
Suppose you are currently retired and getting pensions or additional forms of retirement income from other sources. In that situation, the amount of retirement pay you already receive may be used to offset your workers' compensation benefits. The single exception is that if you were on the job and sustained a work-related injury prior to retirement, you may still be eligible for workers' compensation benefits.
Can You Retire Before Filing A Workers’ Compensation Claim
It will be assumed that an injured worker's loss of wages is not the result of a work-related injury if the worker leaves active employment while receiving a non-disability pension or retirement benefits.
This may include old age social security benefits paid by or on behalf of the employer. Prior to retiring, it is crucial for an employee who has a work-related injury to notify his or her employer and file a claim for workers' compensation payments.
Can You Retire While Filing A Workers’ Compensation Claim
If you have reached retirement age according to the standards of Social Security or are eligible to retire under your employer's retirement plan, an ongoing workers' compensation claim should not prevent you from retiring. Your workers' compensation claim will not be affected by your retirement. Nevertheless, your workers' compensation benefits are determined by your injury and how much compensation you are entitled to.
If approved, a typical workers’ compensation would provide benefits in a twofold manner:
- Medical Benefits, which cover a hundred percent of your medical bills and therapy related to your workplace injury or occupational illness.
- Disability Benefits, if you are unable to return to work, provide compensation equal to 66% of your total pre-injury wages.
Here are also a few things you need to keep in mind.
Your employer's workers' compensation insurance should pay for all of your medical expenses associated with your injury or illness, starting from the time of injury or diagnosis. In most states, this is true regardless of your employment status. However, there are special rules that apply to certain groups of workers. For more information on the type of workers eligible for workers’ comp benefits, visit this guide by Disability Help.
Wage replacement benefits, also known as disability benefits, may cover temporary or permanent disability. When you have recovered, and the presiding doctor certifies that you are fit to return to work after a temporary disability, you will no longer be able to collect temporary disability benefits.
If you lose a body part as a result of a work-related accident, you may qualify for compensation payments for permanent disability. It is important to remember, however, that if you are not receiving wages anymore because you retired, you will no longer be eligible for wage replacement benefits.
Each injured body part has a corresponding compensation. For instance, under North Carolina's workers' compensation statute (N.C.G.S. 97-31), a specific number of weeks of benefits are allotted to each specific body part. For example, an employee receives 66% of their average weekly wage for 200 weeks (or approximately four years) for the loss of a leg. Retirement, which may be necessary as a result of your leg loss, should have no effect on that benefit.
When Do You Qualify For Workers’ Compensation Benefits As A Retired Employee?
If you are receiving compensation from another source in addition to your workers' compensation benefits, you will automatically be ineligible to collect your workers’ comp checks. This is because the government wants to assist people in finding new employment and would view your wage replacement benefits as double-dipping.
However, there are numerous circumstances under which you can still be eligible for workers' compensation benefits despite receiving other benefits from other sources. The first is if you sustain an injury at work. If your workers’ comp claim is approved, you or your family will be provided with workers' compensation benefits. The government will deduct your SSDI benefits if you are already retired because it is an income replacement program. However, you are still eligible to receive an offset amount from your workers’ comp in addition to your SSDI benefits even when you’re retired (provided that you filed your claim prior to retirement).
What If You Are Receiving Both Workers’ Compensation And Social Security Benefits
An employee who sustains a work-related injury and receives Social Security (SS) old-age benefits has his workers' compensation benefits reduced by 50% of the amount of the SS old-age benefits. However, this rule does not apply to disability benefits. Your temporary or permanent disability benefits under workers’ comp will not be reduced even if you are already receiving SSDI benefits.
If you are a veteran seeking compensation, check out the conditions that make you eligible for VA Disability Claims by Disability Help.