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How Workers’ Compensation Benefits Offset Social Security Disability Payments

filling up a work injury claim form

Understand how workers’ compensation benefits can affect your Social Security disability payments

Some workers who are eligible for Social Security disability benefits may also be eligible to receive workers’ compensation benefits if they have work-related illnesses or injuries. However, workers aren’t able to receive the full amount of Social Security benefits and workers’ compensation benefits at the same time.

In most situations, Social Security requires that Social Security disability insurance (SSDI) benefits be reduced so that the total monthly amount that a disabled worker receives is no more than 80% of the amount she earned when she was fully employed. The process of Social Security reducing disability benefits to account for worker’s compensation is called a worker’s compensation “offset.” The rules about how Social Security calculates worker’s compensation offsets are complicated. Worker’s compensation programs vary from state to state, and each state has different rules about things like the maximum workers’ compensation that can be paid out, the different categories of benefits, and the ways a claimant can settle a worker’s compensation case.

How Social Security Calculates the Offset

To calculate the amount of the offset for a particular recipient, Social Security first determines what it calls the “applicable limit,” or the maximum total monthly amount of combined benefits that the recipient is allowed to get under federal law.

When a claimant receives more money than the applicable limit in any given month, then Social Security offsets SSDI in the amount required to bring the total back down to the applicable limit. Worker’s compensation offsets of SSDI happen more often to those who earned lower incomes when they were working, because their applicable limits are lower and more easily exceeded once the worker starts to receive SSDI and worker’s compensation.

Applicable Limit (Maximum Amount of Benefits)

The applicable limit is the higher of either:

80% of the worker’s pre-injury income, called “average current earnings,” or
the total amount of SSDI received by all of the members of the recipient’s family in the first month that worker’s compensation is received, called the “total family benefit.”

For most SSDI recipients, the 80% of earnings figure will be higher, and Social Security will use that figure in the offset calculation.

Average Current Earnings

How does Social Security calculate average current earnings? It takes the highest one of the following three amounts.

  • the average monthly wage that your SSDI benefit amount is based on (the technical term for this is your “unindexed primary insurance amount”)
  • the “high five,” or the average monthly earnings from the highest five years in a row, or
  • the “high one,” or the average monthly earnings from a single calendar year, either the year the person’s disability began or any one of the five calendar years before that year.

For the vast majority of SSDI recipients, Social Security finds average current earnings by using the “high one” test.

Reduction of SSDI

First Social Security calculates 80% of the average current earnings (or uses 100% of the total family benefit, if that is higher) to come up with the applicable limit. Then it adds the monthly SSDI benefit to the monthly worker’s compensation benefit. If the benefit total exceeds the applicable limit, Social Security will reduce SSDI until it reaches the applicable limit. Social Security will offset SSDI in this manner until the recipient reaches full retirement age and begins collecting Social Security retirement benefits instead of SSDI.

Reverse Offsets

Some states offset their worker’s compensation benefits to account for SSDI, in the same way that Social Security offsets SSDI to account for worker’s compensation. This is called a “reverse offset.” Social Security will not offset SSDI when the state is already offsetting worker’s compensation, as long as the state worker’s compensation law that requires the offset was in effect before February 18, 1981.

States that apply a reverse offset might not apply it to all types of worker’s compensation benefits. Fifteen states have some kind of reverse offset rule, even if it does not apply to all types of worker’s compensation benefits.

Lump Sum Workers’ Compensation Settlements

Many worker’s compensation claimants will settle their cases before a hearing or trial. In many cases, disabled workers give up any entitlement to monthly worker’s compensation benefits in exchange for the employer paying an immediate lump sum payment. Social Security is wise to this fact and will offset SSDI benefits to account for a lump sum settlement.

Social Security has several ways of converting a lump sum workers’ comp payment into a monthly benefit for the purposes of calculating an offset, and it will take a close look at the language of the settlement document when it is offsetting a lump sum. In the most basic method, Social Security converts the lump sum to a monthly amount by dividing the lump sum by the periodic worker’s compensation payment that the person had been receiving, and then applying the SSDI offset for the resulting number of months.

For example, Mr. Jones is 25 years old and had been receiving $1,200 per month in worker’s compensation payments until he entered into a lump sum settlement for $24,000. Social Security will consider Mr. Jones to have received $1,200 per month in worker’s compensation benefits for 20 months ($24,000/$1,200) for purposes of calculating the SSDI offset.

Minimizing the Social Security Offset

Worker’s compensation attorneys often try to draft settlement agreements to minimize any offset of SSDI benefits. Social Security will look at the language of the worker’s compensation settlement document to decide how much of the settlement is subject to offset.

For example, Mr. Jones’ attorney might specify that the $24,000 is meant to be a $50 per month payment for every month until he reaches 65 ($24,000/480 months). Social Security would calculate any SSDI offset based on $50 per month for 480 months. Because Mr. Jones would have a lower monthly income from workers’ comp, he would lose less SSDI, or might escape the offset entirely.

Lawyers also will draft the settlement agreement to exclude medical and legal expenses from the lump sum that is counted for Social Security. Social Security will exclude these expenses from being used to calculate the offset if the language in the settlement document is clear. If this language is not included in the settlement agreement, Social Security may ask for documentation of medical and legal expenses before disregarding those amounts from the offset calculation.

Rules about what issues can be settled and what language needs to be in a settlement agreement all come from state law, not federal law, and so they vary from state to state. If you are worried about Social Security reducing your SSDI benefits because of a workers’ compensation award, you should consult a disability attorney to help you resolve your worker’s compensation case in a way that leaves you with the most money possible each month.

For more information about Workers’ Compensation, please visit DisabilitySecrets.com.

Disclaimer: This information is not a substitute for legal advice. Laws change from time to time, so if you are injured, protect your rights and call today at 1-800-598-2440 or contact the Womick Law Firm online.

5 Things You Should Never Do If You’re Sued

a lawyer in his office showing a document with the text lawsuit written in it

Being sued can take down your business and take away your livelihood. Be prepared for the worst by knowing what to do if it happens to you.

Root canal. Head lice. Breaking down during a rush hour traffic jam without a cell phone. All unpleasant scenarios, but chances are, most people would rather suffer through all of them, even all at once—rather than be sued.

Sean McComber, who has his own financial advising practice at Key Financial Group in Frederick, Maryland, experienced a legal nightmare three and a half years ago, but remembers it like it was yesterday.

“I was leaving the parking lot of a local shopping center, turning left from the aisles of parking spaces and onto the access road running along the front of the shopping center,” he says. “It was one of those rainy winter nights where the darkness feels extra dark and thick, and as my headlights swept to the left through the turn, a lady stepped off the curb right in front of my car.”

He jumped out and found her dazed but apparently unhurt. “She called her fiancé, and she told me I could go on my way as he was going to come pick her up,” McComber says. “Eighteen months later, just inside the statute of limitations, I was served with papers suing me for half a million dollars.”

McComber had just gone into business for himself, previously owning a mortgage company with a business partner. The thought of having to pay out half a million dollars was unnerving, to say the least. But as it turned out, McComber was well insured, enough that his auto insurer hired an attorney, and after a $60,000 settlement was reached 13 months later, he hadn’t lost anything but time.

But not every entrepreneur is so lucky. Keeping that in mind, here are five things you definitely should not do, if you are ever sued.

1. Never admit you’re at fault. “No matter what the circumstances,” says Hunter Hoffmann, head of U.S. communications at Hiscox USA, a small-business insurer headquartered in New York.

If you have mixed feelings about who is at fault, share them with your attorney but don’t say anything to the person suing you—or his or her attorney. At least not right away. After all, you might feel at fault, but not feel like you need to pay an extra million for your employee, customer or supplier’s emotional stress. Or you might actually only be partially at fault, but by stating you were at fault wind up taking all responsibility in court.

“You’re paying your lawyers to represent you, and there’s nothing to be gained by making their job harder,” Hoffmann says.

2. Never throw away documentation relating to your case. Of course, that sounds like a no-brainer. Why would anyone do that? And you wouldn’t, willingly—but you might purge your desk of paperwork one day and not realize what you’re doing. You might empty out files from your smartphone or PC and not realize what you’re throwing out.

“He who has the most documentation usually wins the case,” says John Wilder, a marriage coach in Midway, Georgia, who spent 15 years as a home contractor and was sued a few times—and who has sued a few times as well—and won most of his cases.

Wilder says if you take photos of everything you can, keep every record pertaining to your case and even print out articles relating to your issue—that sort of preparation will keep you from losing your case. But you can’t win if you lose or toss out pertinent information.

“You hand a judge a file, backing up everything you’re saying, and 99 out of 100 times, he’s going to side with you,” Wilder says.

3. Don’t agree to pay money—and expect you’ll be reimbursed later. As crazy as it sounds, Hoffmann says he has seen this happen. In one case, a road contractor who was threatened with a lawsuit for doing a bad repair job “admitted fault and then paid for repairs on the road before contacting us, negating his company’s coverage,” Hoffman says. “By doing this and paving over the road, there was no way for us as the insurer to know if they were actually at fault, what the extent of the damage was and how much the repairs should have costs. These are all areas where insurance can help you, but not if you don’t contact them first.”

4. Don’t assume you have to go to court. Attorneys will almost always try to settle before going to court, and they will tell you not to call whoever is suing you. But Richard Laermer, CEO of RLM PR, a public relations firm in New York City with 14 employees, says he has been sued several times, and he has often managed to win or settle first on his own by calling the aggrieved party.

“Every single time, I’ve swallowed my pride and called up the person, it hasn’t gone any further,” Laermer says. “And, by the way, I have a lot of pride.”

He agrees that it isn’t smart to admit that you’re at fault, but that most people should be able to call and work things out without admitting any blame. He says he’ll often suggest to the other, “Let’s negotiate this down to where we both lose—because in every good negotiation, nobody really wins.”

5. If you do wind up in court, don’t be emotional. “You can’t ever bring emotion into the courtroom,” Laermer says. “You have to pretend you’re, like, two engineers.”

Wilder agrees. “You have to remain deadly calm and speak in very matter-of-fact tones,” he says, referring to the TV show Dragnet and the character’s no-nonsense Joe Friday. “The judge doesn’t want to hear emotion. If you get emotional, it’s going to go against you every time. People go into the courtroom, furious, and they can’t wait to stick it to the other guy. But the judge has to hear this every day. He gets a headache.”

And if you go to court, you will get a headache, too, which is why Laermer says it’s definitely in your best interest to avoid it. In fact, if there’s a sixth piece of advice on what not to do when sued, it probably should be to avoid court in the first place.

Laermer says that “lawyers are great for threatening people, and I’ve gotten a lot done with a good legal letter to somebody who owes me money, but when two people are fighting, if they can’t work it out and have to go to court, that’s the chump method. The court system is all about paying lawyers.”

Plus, it’s simply a very stressful experience, far worse than any root canal. “Who the hell wants to go to court?” Laermer wonders. “It’s been the worst experience in my adult life.”

Disclaimer: This information is not a substitute for legal advice. Laws change from time to time, so if you are injured, protect your rights and call today at 1-800-598-2440 or contact the Womick Law Firm online.

For more information on things you should never do if you’re sued, please click here.

Sued by a Guest: Can I Get Sued by Somebody Getting Hurt in My House?

Young man bandage his girlfriend with first aid kit at home after an injury

Unless you’re a hermit who never invites anyone to your home, you open yourself up to potential liability every time someone who doesn’t live in your household pays you visit. From your mother-in-law to the UPS delivery guy, when someone else sets foot on your property, you could be liable if they’re injured, whether you did anything to cause the injury or not. The injured person could sue and charge you with negligence, and seek payment for medical bills, lost wages or pain and suffering. A lawsuit isn’t inevitable, but it’s a possibility you should be prepared for.

Accidents Happen

Though you should do your best to keep your home free of obvious hazards such as wandering pet alligators and gaping holes in the floor, you can’t always account for casual hazards such as water dripping on the floor or a rug slipping out from under someone. Even the best behaved dogs might bite when provoked, that antique chair might collapse when your 300-pound uncle takes a seat, and you can’t predict people’s own clumsiness.

First Response

The American Bar Association, in an article in the Los Angeles Times, notes that your first response when someone is injured in your home should be to render aid. Whether this means calling an ambulance or supplying an ice pack, you should do so. Expressing concern for the injured person is great, but don’t admit fault. If a lawsuit should develop, anything you say can and may be held against you. Even if you feel responsible, such as your dog biting a friend’s toddler, and intend to pay medical bills, don’t make the offer in the heat of the moment.

Homeowner’s Insurance

If you have homeowner’s insurance, part of that insurance covers your liability if someone is injured at your home. Liability levels start at $100,000. That amount won’t go far if someone needs major surgery or sues you for pain and suffering, so you may want to ask your insurance agent about increasing that amount to $300,000 or even $500,000. The insurance should pay medical bills if someone is injured.

Umbrella Policy

An umbrella policy picks up where your homeowner’s liability leaves off. For this reason, it’s sometimes known as excess liability coverage. Umbrella policies cover your liability not just at home, but in your cars, vacation home and other property you may own. You can purchase an umbrella policy for $1 million or $2 million for less than $100 in additional premium costs on most homeowner’s policies. Umbrella policies protect you from large lawsuits that, if you lose, could wipe out your finances. Some policies will pay to defend you from such a lawsuit.

Considerations

Every policy differs in the things it covers and the amounts it will pay. If you own a swimming pool, for instance, your homeowner’s policy may require you to fence the pool and even install alarms. Otherwise, the policy might not pay a claim involving the pool. Some policies won’t pay up if you own certain breeds of dogs, or a company may cancel your policy if your dog has bitten someone before. The liability insurance attached to your homeowner’s policy doesn’t cover someone who works for you, such as a contractor or housekeeper; before you hire someone, verify that they have their own insurance. The insurance also doesn’t cover deliberate acts that result in injuries, such as you breaking your belligerent neighbor’s nose when he criticizes your choice of paint color. If you have a business at home, you may need a separate liability policy for the business.

For more information on getting sued by a guest, please visit TheNest.com.

Disclaimer: This information is not a substitute for legal advice. Laws change from time to time, so if you are injured, protect your rights and call today at1-800-598-2440 or contact the Womick Law Firm online.

5 Important Steps to Take after a Dog Bite Accident

Aggressive Dog

If you or someone you know was bitten by a dog, it is important that you consult with a dog bite lawyer as soon as possible. Your lawyer will make sure that you get the proper medical treatment, find out as much as possible about the dog that bit you, get witness statements regarding your attack and the dog’s previous behavior, and identify sources of compensation for your loss. Your New Jersey dog bite lawyer will build a strong case and aggressively pursue the compensation you deserve.

Most dogs are generally friendly animals. However, certain breeds of dogs can be vicious and even when not invoked, causing serious injuries to the victims they attack. If you have been attacked or bitten by a dog, the owner may be liable for the extent of your injuries. The steps you take immediately after the incident can significantly impact your recovery and your ability to obtain the compensation that you deserve.

What To Do After a Dog Bite Incident

After a dog bite or attack, you need to take every step necessary to protect yourself and your legal rights. Below are five important steps you should take after getting injured in a dog bite or attack:

1. Document the scene of accident – Take pictures of the scene of the accident, especially of the dog that attacked you. You should note the size, breed, color and name of the dog, as you may have to identify it later.

2. Obtain contact information of the dog owner – In order to seek compensation from the dog owner, you need to obtain all pertinent information, including name, address, and telephone number.

3. Call the police or 911 – If you or a loved one was seriously bitten by a dog, you should immediately call 911.

4. Report the incident to your local animal control – You should report the incident to your local animal control. Do not give extensive details until you have consulted with an attorney.

5. Seek medical attention – After the dog attack, you should immediately follow up with a physician, especially if you sustained serious injuries.

Perhaps the most important step you should take is to consult with an experienced accident attorney that specializes in handling dog bites or attacks.

For more information on dog bites, please visit HG.org.

Disclaimer: This information is not a substitute for legal advice. Laws change from time to time, so if you are injured, protect your rights and call today at 1-800-598-2440 or contact the Womick Law Firm online.

Dog Attacks: My Dog Just Bit Someone, What Do I Do?

Two mixed breed dogs and their trainer on the lawn at a park. The dogs are fight-playing.

Most people see their pets in a light similar to their own children. So, when a dog misbehaves it may be easy for an owner to overlook the bad behavior and forgive the errant puppy. But, what if the dog bites someone? Are there legal ramifications? What should an owner do?

When a dog bites someone, initial reactions can range from humor to shock and panic. But, it is important to take swift action to make sure the incident does not escalate and to avoid liability. It is critical to remain calm, even if the bite is serious. Immediately confine the dog to a crate or another room and offer first-aid to the bite victim. Be sure to clean any wound thoroughly and immediately to avoid infection. If the injury warrants, contact 911 for emergency medial attention.

Exchange information with the victim much as you would after a motor vehicle accident. Get their name and contact details and be prepared to provide your homeowner’s insurance information (it will be the most likely policy to cover the dog bite). Avoid becoming confrontational with the victim or blaming them for the incident, as this may invoke their anger enough to file a lawsuit against you and/or seek the destruction of the dog by animal control.

If there are any witnesses to the incident, be sure to get their contact information, as well. As soon as you are able, be sure to get a copy of your dog’s medical records, and particularly their vaccination history. If necessary, inform local authorities of the incident and comply with their orders. It may be frightening to discuss your dog’s fate with animal control, but it will usually be better if you are the one to report the incident than the injured party.

Dog bite laws vary widely from one jurisdiction to another, so it will be important to contact a local attorney for the best advice on what you should do to protect yourself and your pet from a legal standpoint. You can find a list of local attorneys by visiting HG.org and searching by your location and the practice areas of the lawyers in question.

As a general rule, though, owners are liable for the damage caused by their pets, even if someone was trespassing on the owner’s property at the time of the incident. Warning signs are generally required to avoid some liability to trespassers, but even this may not fully protect the owner under some circumstances. Check with your attorney to find the best course of action for your location.

From the state’s perspective, dogs that bite people may pose a serious risk to the community. It is not uncommon for a dog to be quarantined at a state facility for a period of time to ensure the dog is not rabid or otherwise infected with a communicable disease. If this is not the first time the dog has bitten someone, the government may designate the dog a “dangerous dog.” This could lead to enhanced supervision requirements for the owner or even the euthanization of the animal in question.

The state may also hold you, as the owner, responsible for the dog’s actions in a criminal setting. The attack may be considered a form of battery, and the dog may be considered an “aggravator” (i.e., something that makes the battery more dangerous, like a weapon). Such charges are very serious, even if the injury caused by the dog seems minor, and must be taken seriously. Otherwise, you could end up with a criminal record, heavy fines, or even jail time.

While you may or may not end up being found either criminally or civilly liable to pay for the bite victim’s medical expenses, it is a good idea to offer to do so anyway. If possible, this offer should be made immediately after the biting, as this may soften the victim’s resolve with regard to reporting the incident to authorities or hiring an attorney to pursue legal action against you. It would also moot a portion of the damages to which the victim would be entitled, making it difficult for them to pursue legal action against you should things turn sour later.

As a responsible dog owner, it is your duty to ensure that your dog does not bite people. Make sure your dog is properly trained, that you have warning signs if your dog is allowed to run free on your property (even behind fences), and that you know how to treat a dog bite should it occur. If it is already too late, act quickly to mitigate the situation, as your rights (and your dog’s life) may depend on it. And, contact an attorney at once if a dog attack does occur to be sure you take all of the appropriate actions to protect yourself and your pet.

To fine out more information on what to do when your dog bites someone, please visit HG.org.

Disclaimer: This information is not a substitute for legal advice. Laws change from time to time, so if you are injured, protect your rights and call today at 1-800-598-2440 or contact the Womick Law Firm online.

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