The concept behind Federal Disability Retirement is a simple one: Given a level of proof, the disability should attach only to the extent of the specific job which a person cannot do; otherwise, the Federal or Postal employee should, upon being approved for Federal OPM Disability Retirement benefits, be allowed to remain productive in some alternate capacity, so that he or she may continue to contribute to the social welfare of the country as a whole.
Social Security Disability, in contrast to Federal Disability Retirement benefits submitted and approved by the U.S. Office of Personnel Management, provides that one is essentially considered to be disabled not only from the regular profession or job which you engaged in immediately before being determined to be disabled but, further, you cannot do other kinds of jobs because of your medical condition. Thus, the great distinction between Federal Disability Retirement benefits for the Federal or Postal Worker, and Social Security Disability, is the capacity and ability to work at another, different kind of job other than the one you are found to be disabled from. Of course, Federal and Postal employees who file for Federal Disability Retirement benefits, who are under the Federal Employees Retirement System, must also file for Social Security Disability benefits, anyway. That is just part of the administrative process of filing for Federal Disability Retirement benefits from the U.S. Office of Personnel Management, because if you are approved for both Federal Disability Retirement benefits and for Social Security Disability benefits, there is a coordination of benefits between the two programs – an “offset” of 100% for the first year, then a 60% offset every year thereafter.
Then, of course, there is always the consideration that must be given to the Office of Workers’ Compensation benefits, administered through the Department of labor, under the aegis of the Federal Employees’ Compensation Act. This type of benefit is known as the “work-related” injury, where the wide panoply of issues concerning causality, what constitutes an injury or occupational disease as being “caused” by work, or occurring at work, and whether and to what extent such a work-related injury or occupational disease is compensable through the Federal Employees’ Compensation Act. Often, work-related, compensable injuries are temporary in duration, and the whole point is to try and rehabilitate the injured worker, to compensate as the law allows, and to restore the Federal or Postal employee to one’s former job, work capacity and continuing livelihood.
These are the major tripartite compensation programs for all Federal and Postal employees, whether the Federal or Postal employee is under the Federal Employees Retirement System, the Civil Service Retirement System, or the hybrid and odd one, the Civil Service Retirement System – Offset. Are there differences between the three? Certainly. Moreover, such differences should be taken into consideration because of the overlapping features of all three. For, while all three are independently determined, they can also impact each other in significant ways.
First, one should clearly understand that the Worker’s Compensation program is not a retirement system. Instead, it is a system meant primarily to return the Federal or Postal worker back to work, and to temporarily compensate the Federal or Postal Worker during the period of recuperation from a disease or injury. Second, a Federal or Postal worker who is receiving temporary total disability through the Office of Workers’ Compensation Program cannot concurrently work at another job (with some exceptions concerning second or part-time jobs which the person had already been working at before becoming injured or disabled). On the other hand, a person who is receiving a Federal Disability Retirement annuity through the U.S. Office of Personnel Management is allowed to go out and get a job in the private sector, while still receiving the disability annuity. The income earned in the private sector should be based upon a different profession or line or work, in significant and distinguishable ways, from the job which the Federal or Postal worker was doing while working for the Federal government or the U.S. Postal Service. Additionally, the amount you make cannot exceed 80% of what one’s former position as a Federal employee or U.S. Postal Worker currently pays. Conversely, while some monies can be earned while receiving Social Security Disability, the ceiling is quite low and one needs to be careful not to exceed the low ceiling of allowable earned income.
Third, it is important to understand that if a Federal employee or U.S. Postal worker gets both Federal Disability Retirement benefits from the U.S. Office of Personnel Management approved, along with Social Security Disability benefits, there is a coordination of benefits, considered as an “offset” feature. This is how it works: in the first year of concurrent benefits received, where Federal Disability Retirement benefits are calculated at 60% of the average of one’s highest three consecutive years of service, there is a 100% offset between Social Security Disability and Federal Disability Retirement benefits. Since Social Security disability benefits are considered primary, you would therefore receive the full Social Security disability check, and 100% of that would be deducted from the Federal Disability Retirement annuity check. Every year thereafter, where the Federal Disability Retirement annuity is reduced to reflect 40% of the average of one’s highest three consecutive years of service, there is a 60% offset or reduction of benefits.
In receiving both Social Security disability benefits and Federal Disability Retirement benefits, you should be extremely careful, because if you are receiving the full annuity from both sources, it means that the Office of Personnel Management is overpaying you. It will also mean that, sometime in the near future, the U.S. Office of Personnel Management will demand repayment for any amounts not having been offset between Federal Disability Retirement benefits and Social Security Disability benefits. Pleading ignorance or inability to pay are normally not valid bases upon which to stop repayment actions. As such, if after informing the Office of Personnel Management about the overpayment, no action to reduce the Federal Disability Retirement benefits is taken, you should still set aside the appropriate amount of monies in anticipation of receiving a future demand for repayment.
Retirement is a major life-changing event; early, self-induced retirement resulting from the occurrence of an injury, medical condition, disease or occupational occurrence, can further be a traumatic life-changing event, precisely because it was never anticipated, and certainly unplanned. While such life changes are stressful by the very nature of being unanticipated, this does not mean that one should forego obtaining as much knowledge or understanding the complex intricacies of the intersecting impact potentially resulting from the benefits available. Federal and Postal employees have many tools and resources available, but such benefits and compensable programs remain latent and inaccessible if left untapped. While major life events such as unanticipated medical conditions impacting one’s livelihood and the ability to continue in one’s career may provoke sudden changes in plans, such unplanned events need not result in unwise courses of actions; and knowing the benefits available, the interaction between the benefits, and the impact of filing for Federal Disability Retirement annuity, Social Security benefits, and even Federal Workers’ Compensation payments, will provide a greater framework for one’s financial security well into the future.