How do workers’ compensation payments affect my disability benefits?

Disability payments you receive from workers’ compensation and/or another public disability payment may reduce you and your family’s Social Security benefits.

Your Social Security disability benefit will be reduced so that the combined amount of the Social Security benefit you and your family receive, plus your workers’ compensation payment and/or public disability payment, does not exceed 80 percent of your average earnings (in the last 5 years of work prior to becoming disabled. (Note that the unreduced benefit amount is counted for income tax purposes.)

A workers’ compensation payment is one that is made to a worker because of a job-related injury or illness. It may be paid by federal or state workers’ compensation agencies, employers or insurance companies on behalf of employers.

Public disability benefits (PDB) may affect your Social Security benefit. Those benefits in Rhode Island are called Temporary Disability Insurance (TDI) benefits. Those benefits are paid under a federal, state or local government law or plan. A PDB is not usually based on a work-related disability. They differ from workers’ compensation benefits because the disability that the worker has may not be job-related. Examples are civil service disability benefits, military disability benefits, state temporary disability benefits, and state or local government retirement benefits which are based on disability.