How Workers’ Compensation and Temporary Disability Payments Impact Social Security Disability Insurance benefits?

Receiving Temporary Disability Benefits (TDI) or Workers’ Compensation (WC) can reduce your Social Security Disability Insurance benefits (SSDI). Although it is possible to receive both WC or TDI and SSDI, the combined total of these benefits can not be more than 80% of your previous average earnings. The Social Security Administration (SSA) will generally adjust the amount they pay you based on WC or TDI payments. 

What is the difference between Workers’ Compensation, Temporary Disability Insurance benefits, and Social Security Disability Insurance Benefits?

Workers’ Compensation and TDI are state-run programs that provide temporary income to individuals who can not work due to injuries or illnesses caused by work-related activities. Social Security Disability Insurance (SSDI) is a federal program for workers who can not work on a long term or permanent basis due to illnesses or injuries from any cause. 

This article explains how WC and TDI can affect the amount you get in SSDI benefits. 

Social Security Disability Benefit Payments

The amount of SSDI benefits you will be awarded after being found disabled by the Social Security Administration is a calculation based on your average current earnings.

There are three ways that the SSA calculates your average current earnings:

  • The High-One Formula — The SSA calculates your average monthly wages based on the highest-paid calendar year from the previous five years.
  • The High-Five Formula — The SSA uses your average monthly wages from one year in the previous five consecutive years that represent your highest earnings.
  • Average Monthly Wage Formula — The SSA uses your average monthly wages to figure out your SSDI payments.

Reduction in SSDI Payments

As stated above, the total amount in benefits received can not exceed 80% of your average current earnings calculation. An offset will apply if the combined amount of benefits exceeds the 80% threshold. 

The following is a typical example of how WC and TDI can impact Social Security Disability Benefits (TDI in RI is offset in the same manner as WC benefits).

The Worker has a spouse and two children. His average earnings were $4,000 a month. That means that the household is eligible for SSDI benefits of $2,200. Let’s say our worker also qualifies for $2,000 a month in WC. That would mean that combined, the total in benefits is $4,200. However, the maximum he can receive is $3,200 — 80% of his average monthly earnings. Therefore, his SSDI will be reduced by $1,000 each month.

Minimizing the Reduction in Social Security Disability Benefits

Various methods can help reduce the offset amount. To know exactly how much you can receive in benefits, we suggest you speak to an experienced disability benefits attorney before you agree to a Workers’ Compensation settlement.

Here are some ways to protect your SSDI benefits. 

Spreading out a lump-sum disability payment

Sometimes, instead of monthly benefit payments, WC recipients receive a lump-sum award of benefits. Spreading out the lump sum payment can result in a lesser impact on your SSDI payments. 

Exclusions for certain expenses

An experienced disability attorney can help determine which expenses you can include, minimizing the impact of receiving Workers’ Compensation on your SSDI benefits.


If you are approaching retirement age, it may be advantageous to file for early retirement to avoid lowering SSDI benefit payments by a WC offset. However, you should consult with a disability attorney to see if this is worth it in your situation. 

Other benefits

Receiving benefits such as Veterans Administration disability benefits or Supplemental Security Income (SSI) do not affect your SSDI payments. 

Contact a Disability Attorney

If you are worried about Workers’ Compensation or Temporary Disability Benefits impacting your SSDI benefits, contact experienced disability attorney Sara J. Frankel for help today. 

As a former Social Security Administration staff attorney, Sara has more than 25 years of experience helping Rhode Island and Massachusetts residents get the disability benefits they deserve. She can give you the best legal assistance in your claim for Social Security Disability Insurance benefits (SSDI)  and or Supplemental Security Income (SSI) disability benefits.