Workers’ compensation benefits can be a financial lifesaver when you’re injured. But what happens when you’re nearing retirement age?
If you find yourself in this complex situation, the Rosenfeld Injury Lawyers, LLC attorneys are here to guide you through the legal intricacies.
Read on for the details on whether or not you can retire while on workers’ compensation and how it affects social security retirement benefits, the difference between voluntary and forced retirement, as well as other types of benefits you can consider as a retiree on workers comp.
Can You Retire While on Workers’ Compensation?
You can retire while on workers’ compensation. However, the benefits you receive may be influenced by factors such as your type of injury and the state’s workers’ comp laws.
It’s crucial to understand how this decision will affect both your retirement and workers’ compensation benefits. The interplay between these two types of benefits can be complex and varies depending on several factors, such as the following:
- The laws of the state where you reside
- The nature of your injury
- The type of worker’s comp benefits you are receiving
Making an informed decision requires a thorough understanding of these elements and professional advice to navigate the legal complexities. Some injuries may make it impossible to continue working, pushing you toward early retirement, while others might allow for a more flexible transition.
Types of Benefits That Continue After Retirement
Permanent disability benefits often continue after retirement, but temporary disability benefits usually stop. Different states have varying rules about which types of worker’s compensation benefits continue into retirement.
For example, if you are receiving permanent total disability benefits, these may continue even after you retire.
However, temporary benefits are generally designed to cover you only until you can return to work or reach “maximum medical improvement” and typically cease upon retirement.
Voluntary vs Involuntary or Forced Retirement
The type of retirement you undergo—voluntary or involuntary—can significantly affect your worker’s compensation benefits.
What Is Voluntary Retirement?
Voluntary retirement means you’ve chosen to retire. Your benefits may continue in this case, but specific rules apply, which vary from each state’s workers’ compensation law.
In a voluntary retirement scenario, you may be able to continue receiving certain workers’ compensation benefits, such as permanent partial disability benefits.
However, temporary benefits are generally discontinued, including the following:
- Temporary total disability
- Temporary partial disability
It’s essential to consult your state’s workers’ compensation board or a legal advisor to understand the specific implications of your case.
What Is Forced Retirement?
Forced retirement occurs when you have no choice but to retire, often due to health issues or company downsizing. Depending on your state’s laws, you may still be eligible for workers’ comp benefits in these cases.
Forced retirement often comes with its own challenges, including the abrupt end of a career and the potential loss of income. Workers’ compensation benefits can be a financial safety net in such situations.
Some states allow for the continuation of permanent disability payment benefits even in the case of forced retirement. However, the rules can be complex and may require you to prove that your retirement was involuntary and directly related to your work-related injury or illness.
Does Workers’ Comp End at 65?
Workers’ compensation benefits do not automatically end at 65, but the type and amount of benefits you receive may change.
The continuation of workers’ compensation benefits is influenced by various factors, including:
- The nature of your injury or exposure
- The state’s workers’ compensation laws
- Your employer’s insurance provider policies
Understanding these elements is crucial for planning your financial future, especially if you intend to work past the traditional retirement age or have ongoing medical needs related to your workplace damages.
Age Limitations on Worker’s Compensation Benefits
Workers’ compensation can continue past retirement age, but eligibility for some benefits could change. For example, you may transition from temporary disability payment benefits to permanent disability payments.
Some states have specific rules [1] about the duration of certain benefits, such as temporary total disability, which may have a capped number of weeks.
After reaching that limit, you might be assessed for permanent disability payments, which could continue indefinitely, depending on your medical condition and state laws.
How Workers’ Compensation Affects Social Security Retirement Benefits
Workers’ comp benefits can affect the amount of Social Security retirement payments you receive. Specifically, if you are drawing both worker’s compensation and Social Security retirement payments, you may face a reduction in your Social Security payments.
This is commonly known as the “workers’ compensation offset” [2]. The offset ensures that the combined workers’ comp and Social Security retirement payments do not exceed a certain percentage of your pre-disability earnings.
Understanding this interaction is vital for financial planning and maintaining a stable income during retirement, especially if you have lingering medical issues from a work-related injury.
Interactions Between Workers’ Compensation and Social Security
If you receive workers’ compensation and Social Security retirement payments, the total amount you receive from both cannot exceed 80% of your average current earnings before you become disabled.
This rule is in place to prevent “double-dipping” or receiving full workers’ compensation and retirement benefits from both programs [3] simultaneously.
The Social Security Administration will calculate this offset based on your circumstances, including the following:
- Your average lifetime earnings
- The workers’ compensation benefits you receive
If an offset is applied, it will reduce your Social Security retirement payments based on calculations based on calculations, but it generally won’t affect your worker’s comp benefits.
What Kind of Workers’ Compensation Benefits Last Through Retirement?
Permanent disability workers’ compensation payments are the most likely to continue through retirement, while temporary disability benefits will likely cease.
Knowing which benefits will continue can help you make informed decisions about retirement planning, healthcare costs, and other financial considerations. It’s also important to note that the continuation of benefits into retirement can vary by state, as each has its own set of workers’ compensation insurance laws and regulations.
Temporary vs Permanent Disability Benefits
Temporary disability benefits are generally not designed to continue into retirement. These benefits are meant to be a short-term solution, providing financial support while you recover from work-related injuries or illnesses that affect your ability to work.
Once you retire, these temporary benefits are typically discontinued, as they are not intended to serve as long-term financial support. Alternatively, permanent disability payments may continue, but it’s essential to consult with experts to understand your situation.
Other Types of Benefits to Consider
Besides workers’ compensation and Social Security, Supplemental Security Income, Social Security Disability benefits, and private pensions are other types of benefits you might be qualified to receive. Each has its own eligibility criteria and can affect your workers’ compensation benefits differently.
- Supplemental Security Income is a ‘needs-based’ program that provides financial assistance to individuals with limited income and resources.
- Social Security Disability benefits are based on your work history and the severity of your disability.
Both SSI and SSDI benefits have specific rules about income limits and how workers’ compensation can affect them.
Understanding the interplay between these various benefits is crucial for maximizing your income during retirement, especially if you have ongoing medical expenses or other financial needs.
For instance, collecting Social Security Disability Benefits or Supplemental Security Income could reduce your worker’s comp benefits due to state or federal offset rules. Therefore, knowing how each benefit impacts the other is essential, and planning accordingly is essential.
If you’re receiving workers’ compensation, it’s crucial to consult with a legal or financial advisor to understand how these additional benefits could impact your overall financial picture.
How Can a Lawyer Help?
Taking steps to collect workers’ compensation and retirement benefits can be challenging. Our specialized lawyers can guide you through this intricate process, ensuring you maximize your benefits.
Our Legal Advocacy for Victims
- Understand Your Rights: Our skilled attorneys can clarify certain workers’ compensation benefits you’re entitled to, including for medical bills incurred due to a workplace injury.
- Maximize Benefits: We can help you understand how social security benefits and workers’ compensation interact, as well as calculate your average weekly wage and lost wages.
- Legal Representation: Your attorney can represent you in negotiations and legal proceedings, ensuring fair treatment and the best possible outcome.
Hiring a Personal Injury Lawyer to Maximize Your Workers’ Compensation and Retirement Benefits
Are you the victim of workplace negligence affecting your retirement benefits? The attorneys at Rosenfeld Injury Lawyers, LLC are here to help.
We offer free consultations and expert legal advice on a contingency fee basis.
For more information or to discuss your case, contact our Chicago workers’ compensation lawyers at (888) 424-5757.