What’s the Difference Between FERS Disability Retirement and Workers’ Compensation?
People are often confused about the difference between Workers’ Compensation and OPM FERS Disability Retirement (also known as Federal Disability Retirement). These programs have a lot of similarities and can be hard to tell apart, but understanding the differences can help you figure out which one would be best for your situation.
Both programs are administered by the federal government and pay you if you’re disabled from a disease or injury and can’t perform your job duties efficiently anymore.
OWCP Workers’ Compensation
This program is run by the Department of Labor and it pays federal workers for a disabling disease or injury caused exclusively by your job. This is designed to be a temporary fix until you can return to work.
They have four main types of benefits that you could qualify for; wage loss, medical, schedule awards, and continuation of pay (COP).
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- Wage loss—Compensation payments for time lost because of doctor appointments, therapies, and/or reduced hours due to medical restrictions. The pay rate is 66 percent of your salary or 75 percent if there are dependents.
- COP—If you suffer a traumatic injury, your regular pay will continue for up to 45 days after the date of the injury.
- Medical—Treatments for your approved injury are covered by OWCP and continue for the lifetime of the injury.
- Schedule Awards—If your approved disability causes a lifetime impairment, you may qualify for a schedule award.
You cannot receive wage loss benefits along with a schedule award, OPM FERS disability retirement, or if you work in the private sector.
OPM FERS Disability Retirement (Federal Disability Retirement)
This program is administered by the Office of Personnel Management and pay federal workers for a disabling disease or injury regardless of how it was caused or when it first started. The requirement here is that the injury or disease must be keeping you from performing the essential duties of your job.
It is designed to support you until you switch over to your regular retirement at age 62 – a “bridge to 62” in other words. Unlike OWCP Workers’ Compensation, the amount of time you receive OPM FERS Disability Retirement payments count towards your years of creditable service. This is important because when your annuity is recalculated at age 62, those years receiving Disability Retirement still count as years of service in the federal government.
You’re also allowed to work in the private sector and make up to 80% of your previous salary while receiving payments from OPM.
Can You Receive Both?
You can be approved for both OWCP Workers’ compensation and OPM FERS Disability Retirement, but you can’t receive wage loss and Disability Retirement payments at the same time. You can receive OWCP medical and schedule awards payments while receiving Disability Retirement benefits, though.
You can choose between wage loss and Disability Retirement if you’re approved for both. Generally, OWCP pays more, but remember, it’s only designed to be a temporary benefit.
If OPM approves your case before OWCP does, they will begin paying out your annuity. However, if OWCP also approves you, and you accept, the money already paid to you by OPM will have to be paid back to them. It’s also possible to pause your Disability Retirement benefits until after your wage loss payments run out.
Special Circumstances: When You Can Receive Both
There are a couple of instances where you can receive a Disability Retirement annuity and OWCP benefits concurrently:
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- You are receiving a Schedule Award from OWCP.
- You are receiving OWCP benefits due to death of another person and you are eligible for an annuity based on your own federal service.
- Your OWCP payments are suspended because you are receiving a 3rd party settlement from the party directly responsible for your injury. In this example, your annuity may be paid during the period that your OWCP benefits are suspended.
*If after you retire, and you are receiving a Disability Retirement annuity and a Schedule Award, you must notify OPM if your Schedule Award is changed to a non-scheduled OWCP benefit.
If you think you may qualify for one or both of these benefits, give us a call for a free consultation.
