Will Work Comp Payments Affect My Social Security Disability Benefits?

Photo courtesy of Stuart Miles / FreeDigitalPhotos.net

Photo courtesy of Stuart Miles / FreeDigitalPhotos.net

In a recent blog post, I explained how Iowa utilizes the “80% rule” to determine the maximum amount of money an individual can receive via disability benefits. In short, an employee is entitled to up to 80% of their regular weekly wages when they are hurt and miss work. This is not the only application of the 80% rule in Iowa work comp law, however. We also see this principle utilized in the relationship between social security disability benefits and workers’ compensation disability benefits.

If you are 64 years of age or younger, you will likely not be able to receive your full social security disability payments while also collecting work comp disability benefits, unless they come from private sources. This is because the sum of your workers’ compensation payment and your social security disability payment are not to exceed 80% of your average gross weekly wages in Iowa. If your combined workers’ comp and social security payments are less than 80% of your regular paycheck (before taxes), then you will receive both payments in full. If the sum of those payments is greater than 80% of your regular paycheck, however, then the difference will be taken out of your social security disability payment.

Here’s a quick example: Let’s say you make $500 per week before taxes and receive $400 per week in social security disability benefits. Due to a work injury, you are set to receive $200 per week in disability benefits from a public entity, such as a state or federal workers’ compensation agency, an employer, or an employer’s insurer. Eighty percent of your gross weekly wages is equal to $400 ($500 x .80). The sum of your social security and workers’ compensation disability benefits is $600 per week, which exceeds the 80% rule by $200. Therefore, your social security disability payment would be temporarily reduced to $200 so that your total disability benefits would not exceed $400. Your social security disability benefits would revert back to $400 when you return to work (therefore ceasing work comp payments) or turn 65 years old.

Have more questions about the interactions between your workers’ compensation and social security disability benefits? Feel free to contact Carpenter Law Firm at any time to discuss these or any other work comp questions and topics. Our expertise in Iowa workers’ comp law is a resource for all temporarily and permanently disabled workers in Iowa. Give us a call today!

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