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Do Workers' Compensation Benefits Offset Social Security benefits?

In Arizona, Social Security Disability is typically reduced by the extent that the claimant's disability benefits and workers' compensation benefits exceed 80% of the average current earnings. Social Security has its own system of determining "average current earnings."

Social Security defines that to mean the largest of "the average monthly wage used for purpose of computing benefits; one-sixtieth of the total wages for the five consecutive calendar years during which the claimant had the highest wages in self-employment income; or one‑twelfth of the total wages in self-employment income for the calendar year in which the claimant had the highest wages during the five proceeding years."

The Social Security administration is supposed to deduct the following items from the workers' compensation benefits before calculating an offset:

  • Legal expenses
  • Rehabilitation expenses
  • Past and future medical expenses
  • Payments to dependents
  • Payments for specific loss

It is important to note that lump sum settlements of workers' compensation benefits are subject to the offset. It's important to have a competent workers' compensation attorney handling your case to ensure that an offset paragraph is included in any settlements of benefits to protect the Arizona Social Security claimant from any offsets against their disability benefits.

Please feel free to contact Fendon Law Firm for any workers' compensation or Social Security disability questions or for a consultation. We offer free consultations on both types of cases. We are the largest family owned and operated workers' compensation and Social Security disability law firm in the state of Arizona. We treat clients like family because we are family.