The Federal Employees Retirement System has 3 components: the FERS basic benefit, Social Security benefit, and the Thrift Savings Plan benefit. Because Social Security is one component, often it can be confusing how each one affects the other and how they are related to one another. This becomes especially true if you become disabled and need disability benefits. The following will help you understand how these 2 programs relate to one another.
Requirements
FDR:
- You need to 18 months of creditable federal civilian service to qualify for federal disability retirement, and you must have become disabled in a position while in federal service
- The disability must last at least one year
- Your agency must certify that it is unable to accommodate your medical condition in your current position and it has considered you for any vacant position in the same agency at the same grade and pay level, within the same commuting area, for you which you are qualified for reassignment
- You, or your legal guardian, must apply before your separation of service, or with one year
- You must apply for Social Security benefits
Social Security:
- You must suffer from a long-term (1 year or more) or permanent disability that completely prevents you from performing any type of work. It’s a total and permanent disability benefit awarded when you can’t complete gainful employment.
Amount
FDR:
- You receive 60% of your High-3 salary the first year on federal disability retirement and then 40% of your High-3 every year after that, until age 62.
- Because this type of disability retirement is considered “occupational” and not total or permanent, you can work in the private sector and earn up to 80% of your current salary in any position within your doctors’ restrictions.
Social Security:
- The dollar amount you receive is based on taxes you’ve paid throughout your working life.
**You may have the situation where you receive approval for both benefits. In this case, they offset. Social Security becomes the primary benefit and you receive those payments in full, but your federal disability retirement payments will be reduced by a percentage of Social Security.
Example:
- 1st year=FDR-100%SSD
- 2nd year=FDR-60%SSD
Having both these benefits usually results in a higher annuity, but it severely restricts your earnings potential because it completely cuts out the option of being able to earn up to 80% of your salary in the private sector.
