Quick Takeaways
- Reasonable accommodation is required: OPM requires you to have gone through the reasonable accommodation process before you can qualify for Federal Disability Retirement.
- Medical documentation must be clear and specific: Your doctor’s restrictions and prognosis must directly link to the essential duties you can no longer perform.
- Missing deadlines can end your case: If separated from your agency, you have one year to file; appeals must be submitted within 30 days of a denial.
- Do not contact OPM for status updates: Reaching out too frequently has been shown to negatively impact case outcomes — silence from OPM is normal.
- Legal representation significantly improves outcomes: With hundreds of thousands of dollars potentially at stake, having a knowledgeable team navigate OPM’s strict requirements may be the right option.
Common Questions
Q: What is Federal Disability Retirement and who qualifies?
A: Federal Disability Retirement is a benefit built into FERS [Federal Employees Retirement System] that is available to any federal employee who is disabled and has at least 18 months of creditable civilian service. OPM [Office of Personnel Management] administers the benefit.
Q: How much will I receive on Federal Disability Retirement?
A: For the first year, you receive 60% of your high-three average salary. Every year after that, it drops to 40% of your high-three — until age 62, when it recalculates as your regular retirement. The high-three is the average of your highest 36 consecutive months of basic pay.
Q: Can I work while receiving Federal Disability Retirement?
A: Yes — you can work in the private sector and earn up to 80% of what your previous federal position currently pays, as long as you stay within your doctor’s medical restrictions.
Q: What happens to my health and life insurance if I’m approved?
A: As an approved annuitant, you have the option to continue your FEHB [Federal Employees Health Benefits] and FEGLI [Federal Employees’ Group Life Insurance] coverage even after leaving your federal position.
Q: What are the most common reasons applications get denied?
A: The most common issues include unclear medical restrictions, an inconsistent date of disability, failure to go through the reasonable accommodation process, submitting documents that don’t support the claim, and missing OPM deadlines.
Full Webinar Transcript
Federal Disability Retirement Benefit Overview
Michelle Green (Case Manager Supervisor): Federal Disability Retirement is actually already a part of the retirement that you pay into as a FERS employee. It is available to any federal employee who is disabled and has at least 18 months of creditable civilian service. OPM [Office of Personnel Management] is actually the one who provides this benefit.
Sophie Rost (Learning & Development Manager):Some of the highlights of this benefit include:
- A monthly annuity
- It adds creditable years of service
- It allows you to work in the private sector
- It can provide you with federal employee health and life insurance even after you’ve stopped working in your federal position
Michelle: A big question we often get is how much can you receive on Federal Disability Retirement. For the first year you receive 60% of your high-three, and every year after that it is 40% of your high-three. This is considered taxable income, but you do have the option to keep your life or health insurance and you do have the option to choose whether you would like to leave a surviving spousal benefit.
Sophie: What Is the High-Three Average Salary? Your high-three is the average of your highest 36 consecutive months of basic pay. OPM calculates this, but you can request a benefits estimate from your HR department or check your adjusted basic pay on your SF-50 to get an idea of where it would fall.
Michelle: To recap: for the first year you will receive 60% of your high-three average, and then every year after that will be 40% — all the way up until you turn 62, at which point it recalculates and becomes your regular retirement.
Sophie: Once you have stopped working for the federal government and are receiving this Disability Retirement pay, you can also work in the private sector and make up to 80% of what your previous position’s salary is making.
Michelle: So many of our clients do go on to start new careers doing other things. As long as you are under that 80% income cap and you stay within your doctor’s medical restrictions, you can supplement the income you will be receiving for your Federal Disability Retirement with work in the private sector.
Sophie: Once on Disability Retirement, you will continue to earn creditable years of service for your federal annuity — for when it recalculates when you turn 62. This is really important for that calculation and can significantly increase what your pension will look like when you are of normal retirement age.
Michelle: Another really important consideration for many of our clients is their health insurance or their life insurance that they currently have through their agency. As an approved annuitant for Federal Disability Retirement, you do have the option to continue to receive those benefits. You can continue to receive your health and your life insurance benefits once you are approved.
The Application Process
Sophie: It is a long process to gather your documentation and apply for Disability Retirement and wait for that decision. If you’re working with our firm, we work on gathering the actual application forms, the medical evidence, and documentation from your agency to make sure your application is as strong as possible. With our firm, this can take between 30 to 90 days to get everything gathered and submitted to your agency.
Once it is at your employing agency, they are reviewing the application for completion, making sure their portion of the documentation is completed, and they will complete the application and forward it to OPM for a decision. Once at OPM, your application will be assigned a CSA number to track your case and then be assigned to a medical specialist for a decision to be made. The medical specialist will review the application in full and may send out a request for additional documentation — especially if they want more recent records or need anything additional from your agency to make their decision.
10 Mistakes to Avoid When Applying for Federal Disability Retirement
Mistake #1: Having No Reasonable Accommodation
Michelle: The first big mistake that we want to avoid is having no reasonable accommodation. OPM actually requires this process in order to qualify for the benefit — you have to have exhausted these efforts with your agency in order to qualify. This is a process that you’ll need to go through. If you work with our firm, your case manager will be there to help talk you through this process, but ultimately OPM is looking to this process to see if your agency could provide accommodations that would allow you to perform your job, or find another position that you would be able to perform.
Key Point: Reasonable Accommodation Is Not Optional — OPM requires documented proof that you pursued reasonable accommodation with your agency before they will approve a Federal Disability Retirement claim.
Mistake #2: Unclear Prognosis or Restrictions in Your Application
Sophie: In order to be eligible for Federal Disability Retirement, your condition must be expected to last for at least 12 months. Additionally, your doctor or medical provider should have clear restrictions that prevent you from fully performing your job duties. OPM can be really strict about wording when looking at a case, so make sure that the prognosis and restrictions are very clear and that it lines up with specific job duties that you’re not able to perform.
Mistake #3: An Inconsistent Date of Disability
Michelle: When you are filling out your application for Disability Retirement, you have to decide what date you became disabled from your position. This can be a very tricky date to choose because sometimes our clients will have conditions that maybe they’ve had for a very long time, and so settling on a specific date can feel tricky. But if you do work with our firm, your case manager will be there to help you choose that date.
This is really the point when you feel that these medical conditions became disabling from your job — where you were no longer able to perform all of the essential duties of your position. We like to try to find that date and make sure it agrees with what your agency reports about your performance, attendance, and conduct, and where your medical records become most supportive and indicate an exacerbation in symptoms or something that can show that this is when things changed and you were no longer able to perform your position.
Mistake #4: Not Complying with Recommended Medical Treatment
Sophie: It is important that if your doctor recommends a treatment plan or to follow up with certain specialists, that you do continue to follow these recommendations and do what you can to work on treating your medical condition. If you are not complying with your doctor’s recommendations, it could appear that you are not working towards getting better, and OPM can take this as a good reason to deny you if they don’t feel that you’re working towards improving your health.
Extreme Treatments Are Not Required — OPM is more lenient when it comes to treatments that could be considered extreme, such as invasive surgery or procedures that could significantly impact other aspects of your health. You are not required to follow through with those types of treatments.
Mistake #5: Submitting Unsupportive Documentation
Michelle: This is another one that can be a little bit tricky when I’m working with my clients, because sometimes we have to think about things a little bit backwards. We want to submit the documents that show that things aren’t great at work and that you’re not following through with all of the essential functions of your position.
On the other side of the coin, we do not want to submit:
- Positive performance reviews
- Decreasing VA disability ratings
- Poor conduct reviews
- Unclear restrictions or doctor’s notes that could imply you might recover soon
It’s very important that every document we submit to OPM supports your case. We do not want to provide them with documentation that might make them deny your claim.
Mistake #6: Not Notifying Your Supervisors
Sophie: Another mistake that we see a lot is not notifying your supervisors when you are struggling to perform your duties, or if you do have restrictions and are not letting them know. It’s important to make sure that your employing agency is aware of your disability and your struggles with your position.
We do see a lot of clients who have always been able to be successful in their job, and once they have medical conditions that are impacting their ability to work, they just keep it to themselves and try to power through. But it is so important that your agency can note a deficiency in your service — because OPM absolutely looks for this. If they see documentation from the agency that shows that there’s absolutely nothing wrong with your performance, then it can be more difficult to get an approval on that application.
Mistake #7: Filling Out the Forms Incorrectly
Michelle: While this one might seem quite simple, it is actually very important. The forms required for the application can be very confusing and certainly overwhelming. There are many questions that require detailed and specific responses, and often agencies may not know how to complete the forms either. One major benefit to having legal representation during this process is that we are familiar with every form and every question that may need answers, and we are here to help with that entire process.
Mistake #8: Missing Deadlines
Sophie: This is huge. OPM can be very strict whenever there is a deadline for your application. For many of our clients, there is not a deadline to submit their retirement application — however, if you have been separated from your agency or removed from your position, then you have one year from the effective date of separation to submit your Disability Retirement application to OPM. If you’re working with us, it is so important to let your case manager know if you have been separated, just so we are fully aware of this deadline.
Another deadline that is more common is once the application is being reviewed at OPM — they will often request additional documentation and have a deadline to submit it. It is important to continue treatment throughout this process so that whenever OPM is reaching out for additional documentation, we’re able to acquire those medical records and supportive documentation and get it to OPM for them to finalize their decision.
Key Point: Appealing a Denial — If your initial application is denied, you have 30 days to appeal. If you are not in contact with OPM within that 30-day window, you have missed your opportunity to request a reconsideration appeal for the Disability Retirement application.
Mistake #9: Contacting OPM Too Frequently
Michelle: Along the same lines, talking about the timeline — once the application has been received by OPM, it can be very hard to wait, because the wait is often very quiet. Unless you’re receiving one of those requests Sophie just mentioned, you will not hear anything from OPM at all, and that can be very hard. We know that your lives are often hanging on this decision.
Number nine is very, very important: we strongly recommend that you do not contact OPM. We don’t want you reaching out to them too many times to ask for updates or to ask where things are in the process. We have found that doing that really seems to have a negative impact on the outcome of cases.
Silence from OPM Is Normal — During the review period, long stretches of no communication are completely normal. Just as normal as receiving a request for more medical records is not hearing anything at all until a decision is reached. Refrain from reaching out to OPM during this time.
Mistake #10: Not Hiring Legal Representation
Sophie: Finally, one mistake could be not hiring legal representatives to work with you on your Disability Retirement application. Having a legal team to help you through this long and confusing application process can make a huge difference — not only on the outcome but just with your mental health and confidence in your application. The case managers and attorneys at our firm are very familiar with the requirements that OPM has to approve these applications and what can help and hurt your case.
In most cases, there are hundreds of thousands — if not millions — of dollars at stake, and you do not want to risk your livelihood and your future, especially when dealing with these disabling medical conditions.
Michelle: That’s exactly right, Sophie. This benefit can be life-changing, and you don’t have to go it alone, especially with all the avoidable pitfalls we are always seeing.
Final Recap
Sophie: Federal Disability Retirement can be a life-changing benefit, but the application process is often long and overwhelming. It is so important to have the right medical documentation, maintain communication with your agency and medical provider, and stay within all of OPM’s strict deadlines.