Clemmons, NC asked in Workers' Compensation and Social Security for North Carolina

Q: How does a lump sum worker's compensation settlement affect future SSDI monthly payments? Please see details.

Hello! My husband received a WC lump sum settlement of 155,000.It was structured that he will "receive" $119/wk for the next 25 years.(even though he already received it all in one sum) He made around $80k per year when working. If he files and wins his SSDI case, his monthly payment will be about $3200. He will have approximately $3700 a month coming in between comp and SSDI. I heard that the reason the SSA will offset some of a persons SSDI monthly payment amount is because, in a case like this, they're not allowed to make over 80% of the money they made while they were working. 80% of my husbands usual salary would be $64,000 per year ($5300 per month).The $3700 per month that he will be making when combining SSDI and comp is below that, so why are they talking about possibly lowering his monthly payments by $550, citing the comp award? I know it isn't the Family Maximum Benefit rule that is the problem because even though I also get SSDI, it's from my own earnings record. Thanks

1 Lawyer Answer
David Gantt
David Gantt
  • Workers' Compensation Lawyer
  • Asheville, NC
  • Licensed in North Carolina

A: Social Security Administration will not permit individuals to receive more than 80% of pre-injury monthly gross earnings from combined Workers' Compensation (WC) and Social Security Disability (SSD) payments. This policy was enacted to avoid the situation where injured workers are making more than pre-injury earnings and have no incentive to try and return to gainful employment. Your lawyer properly settled your WC claim in a lump sum and then allocated the net sum you received over your life expectancy in order to push your monthly receivables below the 80% ceiling. Before SS can reduce your monthly SSD check, you will receive a written explanation of how they figured the reduction based on the 80% rule. My office has managed to resolve many of these claims by simply sending a copy of the final WC Order approving the lump sum and pro-rated distribution to local SS office. Many times, the SS office has only been notified of the lump sum amount and does not know about the pro-rata language that can push your countable income below the 80% ceiling permitted under SS law. If you have not received a written detailed explanation, you should make an appointment with SS and ask them to explain their calculation. You can appeal this decision if you disagree. You should also contact your local member of Congress or US Senator for help here. The staff in these elected official's office can often get an explanation faster than legal representatives can. From the numbers cited in your note, you may have a legitimate grievance.

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