In our recent webinar we covered how federal employees can protect their financial future with Federal Disability Retirement. There were a lot of great questions and we’re going to go in-depth with some of our answers here.
This is a very relevant subject, as more and more federal employees become concerned about the impact of COVID-19 and the tumultuous environment surrounding the USPS. If you are a federal employee that has been thinking about retiring early and using the Federal Disability Retirement benefit, now is the time to do it. Read on for the answers to common questions:
Q: Can you apply for Federal Disability Retirement retroactively?
A: The answer is yes! But you have 1 year from your date of separation to apply. The OPM is very strict about this deadline.
Q: Does filing for Federal Disability Retirement need to be done before or after completing an OWCP Federal Workers’ Comp claim for an occupational disease?
A: You can apply for disability retirement concurrently with an OWCP claim; however, you are not able to receive wage loss payments and disability retirement payments at the same time. Learn more about Federal Disability Retirement vs OWCP.
Q: I have been approved for Federal Disability Retirement, but OWCP Federal Worker’s Compensation is more. Which federal benefit should I take?
A: Many federal employees choose to stay on OWCP wage loss because it is more money, however, we recommend going ahead and getting approved for federal disability retirement so it is ready to go should your OWCP wage loss payments be stopped. When approved for both benefits, you do have the option to switch to your Disability Retirement at the time of approval or any time following.
Q: I have a medical issue that puts me at risk with COVID-19, would Federal Disability Retirement be an option if my employer won’t accommodate my medical issues?
A: This is a very relevant question that many federal employees are contemplating right now, and the answer depends. COVID is an unprecedented situation, however the qualifications for Disability Retirement still apply; including that the disabling condition must last for at least 12 months. COVID-19 in and of itself is not likely to be approved, and if you were fully capable of performing your duties prior to the pandemic, it would be a very tough case to win.
Add: this is a new situation for all federal employees, as well as our office. We would be happy to assess your specific situation—please feel free to contact our office to set up a free consultation. We also have resources covering financial assistance for federal employees impacted by covid.
Q: Can my federal employing agency require me to take a job within my medical restrictions?
A: This answer depends on what type of job they are offering. It must be a vacant position in the same agency at the same grade and tenure, and within the same commuting area to be consider a valid offer of reassignment. For Disability Retirement purposes, you do not have to accept a position that falls outside of these parameters. While you are not required to accept any position the agency offers, please be aware that your agency could start a separation process at any point.
Q: How do you qualify for federal disability?
A: To qualify for Federal Disability Retirement, you must be a career FERS or CSRS employee with a minimum of 18 months employment. You must also have a medical condition that prevents you from fulling the full duties of your position, and your medical condition is expected to persist for a minimum of 1 year. If your agency is unable to “reasonably accommodate” your medical restrictions, you can then submit an application to the OPM. This application is reviewed by the OPM, who issues the decision and administers the benefit.
Q: Can you see a doctor in a different state than where your employed when filing for Federal Disability Retirement.
A: Yes, you are free to treat with the physician of your choice regardless of location.
Q: Can I collect Medical Disability Retirement and OWCP Federal Workers’ Compensation at the same time?
A: You can receive the Federal Disability Retirement annuity and an OWCP schedule award at the same time; however, you cannot receive the OWCP wage loss benefit at the same time as your Federal Disability Retirement benefit annuity. It’s important to be aware of what benefits you can and cannot receive together, and which benefits have an offset.
Q: Once I turn 62 years old, do I have to do anything to convert my Federal Disability Retirement benefit into my regular FERS retirement?
A: Your Federal Disability Retirement will automatically update and convert over to regular retirement, so there is nothing you need to do.
Q: Are social security taxes deducted from Federal Disability Retirement benefits?
A: Federal Disability Retirement payments are subject to Federal taxes and can be subject to state taxes depending on your state of residence.
Q: Under the Federal Disability Retirement benefit, can I earn up to 80% of the High Three Average or of the salary at retirement?
A: Once on Federal Disability Retirement, you can earn up to 80% of the current salary of your previous position. That means that over the period you are on Disability Retirement you’re allowed private sector earnings will increase with the pay increase or Cost of Living Adjustments (COLAs) of your previous position.
Q: I elected to keep Federal Employee Group Life Insurance (FEGLI) while on Federal Disability retirement, can I change that election later?
A: You are always able to drop FEGLI coverage while on Federal Disability Retirement, however if you drop FEGLI coverage you cannot re-elect later. It’s important to note that once you have elected your options in retirement you are not able to add any additional options.
Q: Can you reduce from a 10% to 5% Survivor Benefit, or is this a one-time selection?
A: You are able to change your survivor annuity election up until OPM finalizes your benefits with a completed Spouse Consent form. However, after OPM finalizes the disability retirement benefits, this election can only be changed upon death or divorce. We recommend speaking with a benefits specialist in order to make the best decision for your situation.
Q: Can I apply for Federal Disability Retirement if I have an active Equal Employment Opportunity Commission (EEOC) action?
A: While we cannot advise on EEOC actions, you are able to apply for Federal Disability Retirement simultaneously.
Q: Is disability retirement considered a voluntary or involuntary separation?
A: Federal Disability Retirement is considered a voluntary separation.
Q: Is there a list of accepted disabilities under Federal Disability Retirement so I don’t waste my time applying?
A: There is not a list of specific disabilities, injuries or medical conditions because Federal Disability Retirement applies to any condition that medically disables you from fulfilling ALL the responsibilities of your position.