If you’re applying for Federal Disability Retirement, you may already be receiving — or eligible for — other disability benefits like Social Security Disability Insurance, Workers’ Compensation, or VA Disability. We often get this question: can you receive more than one of these benefits at the same time?
The short answer is yes — but understanding how they interact is critical. Receiving one benefit can reduce the amount you receive from another, which is called an “offset.” Knowing how they work together can help you make the most of your support without unexpected surprises.
Before we get into each benefit, there are two concepts you need to understand.
Benefit Interactions
A benefit interaction describes how multiple federal benefits affect each other sometimes leading to an increased or decreased annuity, depending on which benefits are involved.
Offsets
When two or more benefits counteract each other, that interaction is considered an offset. However, not every interaction is a negative one.
Let’s dig into each benefit and clarify what kind of impact it could have.
Social Security Disability Insurance (SSDI)
Social Security Disability Insurance is a benefit for those who can no longer work due to their disability. It’s based on your work history — if you’ve worked long enough and paid Social Security taxes, you may qualify. The qualification requirements are strict: you must have a serious medical condition that stops or limits your ability to work.
When you apply for Federal Disability Retirement, it is required that you also submit an application for SSDI. An approval is not necessary to qualify for Federal Disability Retirement, but you must apply.
SSDI and Federal Disability Retirement:
If you’re receiving Federal Disability Retirement and are approved for SSDI, your Federal Disability Retirement monthly payments will be reduced by a percentage of your SSDI benefit. In the first year that you receive both, your Federal Disability Retirement payments will go down by the full amount of your SSDI payment. After the first year, your Federal Disability Retirement payments will go down by 60% of your SSDI payment each year until you reach age 62.
Just because these benefits interact doesn’t mean your total income is reduced. After the first year, receiving both benefits at the same time will bring in a higher monthly income than if you were only receiving one benefit at a time — which can be very beneficial for those who are totally disabled and unable to continue working in the private sector.
This breakdown can help visualize the offsets between Disability Retirement and SSDI.
SSDI and OWCP Workers’ Compensation:
If you’re receiving any Workers’ Compensation (OWCP) benefits and are approved for SSDI, you can only receive up to 80% of your previous salary combined. For example, if your salary was $100,000, the most you could receive from both SSDI and OWCP would be $80,000.
SSDI and VA Disability:
You can receive VA Disability and SSDI without any offsets.
SSDI and Private Disability:
Disability payments from private sources, such as private pensions or insurance benefits, should not affect your SSDI benefits.
OWCP Federal Workers’ Compensation
Workers’ Compensation benefits are paid to those who were injured on the job. There are three types of OWCP benefits, and each one interacts differently depending on what other benefits you’re receiving:
Wage Loss Payments are given to those who are unable to work due to an accepted OWCP claim. You will not be able to receive wage loss payments at the same time as Federal Disability Retirement annuity payments.
Schedule Award is a lump-sum payment given to qualifying employees who have an approved permanent impairment to a body part listed on the OWCP Schedule. You can receive 100% of your schedule award while also receiving 100% of your Federal Disability Retirement annuity.
Medical Coverage pays for certain medical services related to your accepted OWCP claim and does not count as earned income that would impact your Federal Disability Retirement. This allows federal employees to continue using their OWCP benefits for medical coverage instead of relying on Federal Disability Retirement annuity payments to cover medical expenses.
If you are approved for both OWCP and Federal Disability Retirement at the same time, you have the option to put your Federal Disability Retirement annuity on hold and remain on Workers’ Compensation to receive wage loss payments. It’s important to notify OPM of this change — failing to do so risks overpayment or termination of benefits. OWCP is not intended to be a long-term benefit, which is why it’s very beneficial to have Federal Disability Retirement approved and ready once your OWCP claim is closed.
OWCP and VA Disability:
OWCP does not affect VA Disability payments.
Veterans Administration (VA) Disability
VA Disability is for military veterans who were injured during service or developed a service-connected medical condition. Many veterans go on to work in the federal government, and if a service-connected condition worsens and begins impairing your ability to work, both Federal Disability Retirement and VA Disability can provide the income you deserve.
The good news: VA Disability does not interact negatively with any of the other benefits listed here. If you apply and are approved for Federal Disability Retirement while also receiving VA Disability, you can receive 100% of both benefits at the same time.
Federal Disability Retirement
Federal Disability Retirement is an early retirement option for federal employees who are struggling to work due to a medical condition. To be eligible, you must meet the following requirements:
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- You must be a career FERS employee
- You must have 18 months of creditable service
- You must have a diagnosed medical condition that is impacting your ability to perform at least one part of your job
From the time you’re approved until you turn 62 and begin receiving your regular federal pension, Federal Disability Retirement covers you in four primary ways:
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- You’ll receive a monthly payment
- You’ll continue earning years toward your pension
- You can keep your health and life insurance
- You’re able to find a new job in the private sector and earn additional income
One of the main benefits of Federal Disability Retirement is that you have the option to work in the private sector while receiving your annuity. This allows you to make up to 80% of your former position’s current salary in addition to your monthly Disability Retirement annuity — essentially allowing you to make up to 140% of your federal salary in year one, and 120% in years two and beyond.
Receiving more than one benefit at a time can help you make the most of your finances, but it also opens you up to interactions and offsets you might be unaware of. It’s possible to get overpayments if you don’t keep track of these benefit interactions, and you can’t get out of paying those back.
Our experienced team specializes in helping federal workers apply for Federal Disability Retirement and understands exactly how nuanced the overlap of these benefits can be. Call our office to schedule a free consultation and make sure you receive all the benefits you deserve.
