An offset is a reduction in your benefits when you collect under two systems. In Washington State, L&I benefits can be reduced if you also receive Social Security benefits. Social Security benefits can be reduced if you receive L&I benefits. Find out what the rules are. For example only one offset is allowed at a time. Find out who will be taking the offset, how much benefits are reduced, and how to calculate your payments.
Can you collect Social Security retirement or disability and L&I benefits (Workers Comp) at the same time?
Yes, you can collect both Social Security and L&I. This is not double dipping. There is a statutory right in Washington State to receive both L&I and Social Security benefits at the same time. However when an injured worker qualifies for money compensation benefits under both systems, for some injured workers, the total amount of money you will receive is reduced (offset). Some L&I injured workers will get full benefits from both L&I and Social Security. Some injured workers will not get full benefits from both L&I and Social Security because some of these benefits will be offset.
Who gets full benefits from both systems and who is offset?
Full benefits –
- For workers who had applied to receive social security retirement benefits prior to the date of their injury
- For workers who were receiving social security benefits prior to their injury RCW 51.32.225
- For ACE high wage earners
Offset Benefits if the above doesn’t apply. There is a statutory offset that will be taken when and if the total combined benefit is greater than 80% of the claimant’s average yearly earnings. Average yearly earnings are usually calculated by looking at the worker’s income during the five years prior to the onset of the disability.
What is an offset?
An offset is a reduction in compensation benefits when two different systems are paying. A Social Security Offset is a money benefit reduction in either L&I or Social Security benefits when an injured worker is receiving compensation benefits from both systems for the same time period. Offsets are technical and complicated. Some persons are offset and some are not.
Does L&I money affect Social Security money?
Yes it does. The federal offset formula according to Social Security can be found in the Program Operations Manual System (POMS) at POMS DI 52120.265. L&I pays full workers compensation benefits and Social Security takes the offset from your disability or retirement benefits when you are ages 62 – 65. The offset during this period can be brutal. Delays by SSA in taking an offset are not time limited and can wreak havoc with your benefits if SSA retroactively decides to take a large offset.
Does Social Security disability money affect L&I and PPD?
Yes, when you are less than 62 or older than age 65. The Washington State L&I offset formula can be found at RCW 51.32.220 and RCW 51.32.225. Social Security pays full compensation benefits and L&I takes the offset from your L&I benefits. If you are offset then L&I does not pay as much as they would otherwise pay. Delays by L&I in taking the offset are subject to a one year recoupment rule. If they delay, don’t allow them to go back more than one year!
You can figure out your L&I Social Security Offset Amount. Here is what you will need:
- Yearly Totals of Earnings – you can find this on your personal social security account at www.ssa.gov/myaccount or you can use this Request for Social Securities Earnings Information Form. It is free to obtain a copy, you DO NOT need a certified copy. Using this earnings information you will need to determine your Average Current Earnings (ACE)
- Based on the five consecutive years after 1950 with the highest earnings. Add all five years together and divide by 5 to determine your ACE
- Now you need to calculate 80% of the ACE. ACE x .80 =
- Break down the 80%ACE to a monthly amount ACE x.80 divided by 12
- Compare the 80%ACE amount to the TL/Pension payment amount and SSA benefit payment. If the TL/Pension or SSA payment is larger than the 80%ACE, you can use the calculator below to estimate your offset. If the 80%ACE is larger you will need to contact us or LNI to help determine your best options. It is uncommon for the 80%ACE to be larger but it does happen.
- Your Total Family Benefit – This is the total family SSA benefit received under the injured workers SSN
- Your Monthly Time Loss or L&I Pension Benefit Amount
Use the Social Security Offset Calculator Computation Sheet for an estimate of your offset.
- Here is a link to the Offset Computation Worksheet
- If this doesn’t make sense, contact L&I Social Security Offset Unit at 360-902-5119
L&I can Help With Offset Information.
Contact L&I Social Security Offset Unit
The Washington State Department of Labor and Industries can explain the rules and answer questions about your specific offset. To get help with a Social Security Offset and to learn more about the rules contact the Washington State L&I Social Security Offset unit at 360-902-5119.
Labor and Industries SSO Benefits Manual. This manual explains offset calculations.
Triennial Redeterminations and Cost of Living Adjustments (COLA)
Some persons get a COLA each year. Some get a triennial redetermination.
Once an offset is in place, your claim will be reviewed every three years (on January 1) to determine if you would benefit from the yearly COLA and are eligible for a higher compensation rate. This is called a “Triennial Redetermination.”
If you do not benefit from a Triennial Redetermination, you may receive a COLA each year on July 1, if granted by state legislation.
For more information, visit www.ssa.gov/news/cola