We all dream about not having to work one day, but have you ever thought about what would happen if you got sick or hurt and could not work? It is something that happens to more people than you might think. And it can happen at any age.
That is why there are programs like Social Security Disability Insurance (SSDI) to help people who are unable to work due to a disability. But when your disability is due to a work-related injury, you may also qualify for workers’ compensation benefits.
Eligibility, coverage and funding sources
Workers’ compensation primarily applies to individuals who sustain work-related injuries or illnesses. It provides medical coverage, wage replacement, and rehabilitation services. Note that these are specifically tailored to workplace injuries or illnesses. The funds for these benefits come from employer insurance or self-insurance.
On the other hand, SSDI is available to those who experience total disability, regardless of the cause. It offers financial assistance for all types of disabilities, but does not directly cover medical expenses. SSDI is financed through payroll taxes under the Federal Insurance Contributions Act (FICA).
Comparison of benefit amounts and duration
Workers’ compensation benefits are typically a percentage of the employee’s average wage. It varies based on state regulations. These benefits aim to cover a portion of lost wages and medical expenses related to workplace injuries or illness. These are generally provided temporarily. It may last until the injured worker recovers or reaches maximum medical improvement. In some instances, permanent disability benefits may be awarded.
In contrast, an individual’s earnings history and contributions to Social Security determine SSDI benefit amounts. The calculation of the average monthly benefit amount is based on past earnings. That is why it can vary from person to person. These benefits may continue as long as the individual meets the eligibility criteria. Or at least as long as they remain disabled. Say, the person’s medical condition improves. If he or she is able to return to substantial gainful activity, their SSDI benefits may be discontinued.
Can one qualify for both coverages?
It is possible for an individual to qualify for both workers’ compensation and SSDI benefits simultaneously. However, there are considerations to keep in mind. SSDI benefits encompass disabilities of any kind. But workers’ compensation only covers those related to work. So, if a person receives workers’ compensation benefits, the amount they receive from SSDI may be reduced to prevent an overpayment. It is essential to coordinate and report benefit receipts accurately to avoid complications.