3 Federal Disability Retirement Payments You Should Be Aware Of

Oct 16, 2023

woman reading about federal disability retirement payments

If you are considering applying for Federal Disability Retirement, it’s important that you are aware of the different payments you will be receiving. There are interim payments, back pay, and your regular monthly annuity payment that you will be receiving throughout your time on Federal Disability Retirement. These payments are important to understand as they can vary depending on a few different factors. Each of these payments can help you maintain your financial stability while you are out of work, which allows you to set up a successful future.

If you are thinking of applying for Federal Disability Retirement, contact our firm today to learn all of your options!

Interim Pay

Interim Payments are typically the first payments you will receive from the Office of Personnel Management (OPM) after you are approved for Federal Disability Retirement. These payments help provide some financial compensation while you are waiting for your annuity payments to be finalized. Interim payments can vary but are typically around 80% of your final annuity.

It may take longer than expected for interim payments to begin as the OPM is currently dealing with backlogs and increased retirement applications at the end of the year. But this is not cause for concern as the OPM will ensure you receive all the money that you are owed.

If you receive your interim payments and they are higher than expected, the OPM may have calculated your payments incorrectly resulting in an overpayment. If this occurs, you will have to repay the OPM any additional money they are owed.

Back Pay

Back Pay is a lump sum payment that you will receive for any time you were out of work due to your disability. We often see federal employees with excessive leave who are worried about their finances because their disability has caused them to lose out on a lot of compensation. We understand how hard it is to continue working with a disability, but back pay can be a nice bonus to help cover any expenses you have incurred while out of work or during the interim period.

You will receive back pay from your last date of pay which will be affected by any income you receive from your agency. If you have been out of work for months and suddenly receive a holiday bonus from your agency, your last date of pay status will update, and you will not receive any compensation before that date. It’s important to be aware of your last date of pay and avoid any payments from your agency if you have been out of work for a significant amount of time.

Your back pay will be paid at your Federal Disability Retirement annuity rate, not your regular pay rate. Keep reading to learn how your Federal Disability Retirement annuity will be calculated.

Annuity Payments

Your Federal Disability Retirement annuity payments will begin once the OPM finalizes your case. Your annuity payments will be based on your high 3 average which is ultimately calculated by the OPM. Your high 3 is the average of your three highest consecutive years of basic pay. You can request an estimate from your HR office or check your SF 50 for your current basic pay.

The first year after approval for Federal Disability Retirement, you will receive 60% of your high 3 average. Every year after that until age 62, you will receive 40% of your high 3 average.

You will receive monthly payments from the OPM after your case is finalized. This payment may be automatically deposited into your bank account, so it’s important to make sure all of your banking information is up to date with the OPM.

Understanding the different payments you will receive while on Federal Disability Retirement can help you plan and budget for upcoming expenses. We understand the entire Federal Disability Retirement process can be confusing, which is why we help federal employees apply for Federal Disability Retirement and secure their benefits.

If you are looking to apply for Federal Disability Retirement, you don’t want to do it alone! We have experience helping over 8,000 federal employees apply for this life changing benefit. Schedule a FREE consultation today to see if you qualify.

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