Q&A – Can I file for Federal Disability Retirement benefits while I am on OWCP Federal Workers’ Compensation?

Jul 9, 2021

Applying for Federal Disability retirement


Do you have questions regarding your Federal Disability Retirement?

Are you considering applying for OWCP federal workers’ compensation benefits?

If so, then this blog post is just what you’re looking for! We’ll take a look at some of the most common questions that came up during our Federal Disability Retirement vs. OWCP Federal Workers’ Compensation webinar. We will give you in-depth answers to those questions and help you make educated decisions about how best to proceed for the future.

Watch the webinar

If you have any other questions that are not answered in this Q&A regarding Federal Disability Retirement or OWCP Federal Workers’ Compensation, we recommend that you check out our other posts in our Q&A series.

Q: If I am accepted for OWCP will I get to keep my current health benefits?

A: If your OWCP claim is accepted, then you will continue to receive your current health benefits. However, you are given the option to cancel those benefits if you no longer wish to receive them.

Additionally, OWCP will pay for all medical bills related to your accepted OWCP claim, including travel to and from your doctor’s office.

Q: If I exhaust all my annual and sick leave and then go on LWOP. Will federal disability backpay to the LWOP date?

A: If you are eligible for back pay, you will receive a lump sum payment that is dated to your last date in pay status, and this is awarded once your Federal Disability Retirement case is approved.

However, if you receive any type of pay from your agency or OWCP Federal Workers’ Compensation while on LWOP then your last date in pay status will reset.

Q: Is it possible to get kicked off wage loss? If so, how would that happen?

A: Yes! While wage loss benefits can be a great help during difficult times, federal employees should not look at it as a long-term benefit and in most cases should expect for this benefit to expire.

In many situations it is a good idea to apply for an additional benefit such as Federal Disability Retirement, if you are not going to be able to return to work.

Q: Can I file for Federal Disability Retirement benefits while I am on OWCP Federal Workers’ Compensation?

A: Yes, you are able to apply for Federal Disability Retirement if you are on OWCP Workers’ Compensation but keep in mind that if you are approved, you will not be able to receive both benefits at the same time. You have the option to move over to Federal Disability Retirement or put Federal Disability Retirement on hold until you are no longer on Workers’ Compensation.

Q: Is mandatory overtime included in the High 3 Average calculation?

A: Yes, mandatory overtime will be included in your High 3 calculation. Your high 3 average is calculated by the OPM from your highest 36 consecutive months of basic pay.

Q: How is overtime determined to be mandatory for calculating my High 3?

A: It is classified by your employing agency and would be included in your sf-50 as part of your adjusted salary. Mandatory overtime is common for Law Enforcement Officers (LEO’s) or firefighters. You can get your sf-50 for your agency’s HR department.

Q: If I sustained an on-the-job injury and accepted by OWCP Federal Workers’ Compensation can my agency terminate me?

A: If your agency has reasonable cause to terminate you then they can do so at any point. However, the reason cannot be the injury itself, unless you have been absent for more than one year.

For those eligible, we typically urge federal employees to apply for Federal Disability Retirement as soon as possible if they are not planning to return to work. This can help federal employees avoid missing the strict 1-year application deadline and have a great backup plan in case they are removed from OWCP Wage Loss.

Q: Do I have to pay taxes on OWCP payments?

A: Most workers’ compensation benefits are not taxable at the state or federal levels. However, a portion of your workers’ comp benefits may be taxed if you also receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).

Q: Is Social Security Disability Insurance (SSDI) Income taxable?

A: The amount that is taxable depends on how much income you have in addition to Social Security. Additionally, where you live can also affect your Social Security taxation. This determines how your benefits are taxed at the state level. There are 28 states and Washington, D.C., that DO NOT tax Social Security income.

Q: Do I keep health insurance while on federal disability retirement?

A: Yes, the Federal Disability Retirement benefit will allow you to continue any health and life insurance benefits that you already carry through your job.

However, you are still required to pay your portion of these benefits, just like you would under regular retirement.

Q: Will I still get my yearly raise and continue to accrue annual and sick leave if my OWCP case is accepted?

A: No, if your Workers’ Compensation case is accepted, you will not receive a raise or accrue any annual or sick leave. Federal Employees’ Compensation Act (FECA) states that an employee who is receiving disability compensation under FECA may not simultaneously receive salary, pay, or remuneration of any type from the United States.

Q: Are there special requirements for federal firefighters when applying for disability retirement?

A: Yes, federal firefighters would fall under Special Provisions. The easiest way to find out if you fall under special provisions is to check your SF-50. There it would state “Retirement – Special Provisions.” Special Provisions employees fall under different requirements for age and service, and they also have a different calculation for their retirement. Additionally, they get special treatment with their retirement date and the amount that the government will be contributing to their annuity.

If you are considering a Federal Disability Retirement, or need help with an OWCP Workers’ Compensation claim, our team of highly trained professionals can provide knowledgeable and helpful advice. If you have more questions that were not answered in this Q&A session, checkout the other posts in our Q&A series, as they may provide answers to your questions.

If you have specific questions regarding your Federal Disability Retirement case, contact us today to schedule a FREE consultation.

Message us & find out if you qualify today!

  • This field is for validation purposes and should be left unchanged.

Recent Articles

6 Key Reasons Why Your Disability Retirement Application Was Denied

Have you recently applied for Federal Disability Retirement, only to receive a denial? The Office of Personnel Management (OPM) is denying more initial applications than ever. However, it's important to understand that a denial does not mean the end of the road for...

Federal Employee Resources

Our ever growing library of federal employee resources give you the knowledge you need to make smart choices about your future.


Frequently Asked Questions

Get the answers you need on-demand, from a team of federal employee benefits professionals.

View FAQ

Federal Benefit Webinars

Twice per month we host webinars to help federal employees better understand their benefits and answer their questions LIVE.

See Webinar Schedule

Benefit Guides

From guides to detailed charts, these educational resources will help clarify confusing federal employee benefits topics.

See our resources