What is the "offset" of Workers' Compensation with Social Security & Disability Insurance?
An injured worker can collect both Workers Compensation benefits and Social Security benefits. However, with some exceptions, an injured worker is not entitled to 100% of each of these benefits.
An injured worker on social security benefits (disability or retirement) is entitled to a combined benefit of 80% of the highest years’ wages earned during the 5 years prior to the injury, or the highest 5 consecutive years of your employment history. If an injured worker had a higher income prior their injury, there may be little or no offset.
In Washington State an injured worker will typically receive 100% of their social security benefits, and their time-loss (or pension) benefits will be reduced to the 80% cap. For example:
Highest years wages for 5 years prior to injury ($60,000 year)
$5,000
80% of this amount
$4,000 per month.
Monthly Time Loss Rate Prior to Offset
$3250
Social Security Disability Benefits
$1750
New workers compensation rate:
$2250
Combined benefit amount
$4000
From the age of 62 to full retirement age. (65-67 depending on the birth year), social security will generally take the offset, and reduce the social security benefits. During this period of time, an injured worker will be entitled to 100% of their workers’ compensation benefits, and a reduced amount of social security.