DISABILITY BENEFIT TIP OF THE WEEK: Offsets for Social Security

Like Long Term Disability, Social Security benefits can also be reduced ("offset") based on income and eligibility for other government benefits, which include:

• Worker's Compensation
• Government Pension Offset
• Windfall Elimination Provision

Worker's Compensation

• If you receive worker's compensation payments, your payments will offset your Social Security Disability and SSI benefits.
• Your worker's compensation settlement can be structured as a lifetime payout, thereby reducing or eliminating the offset. You should advise both your Social Security and worker's compensation lawyers that you would like your settlement to be structured this way.

The Government Pension Offset (GPO)

• Some individuals work for employers, such as the goverment, that do not withhold Social Security taxes and instead provide a pension for their work.
• "Individuals who qualify for noth a government pension based on non-Social Security-covered employment and a Social Security spousal benefit are subject to the Government Pension Offset (GPO) provision. The GPO provision reduces Social Security benefits that a person receives as a spouse if he or she also has a federal, state or local government pension based on work that was not covered by Social Security. The GPO reduction in Social Security spousal benefits is equal to two-thirds of the government pension." (CRS Report for Congress, 7/6/04).

The Windfall Elimination Provision

• If you work in a job where you did not pay Social Security taxes and you also work in another job long enough to qualify for a retirement or disability benefit, you will be subject to the Windfall Elimination provision.
• If you receive a pension from work where Social Security taxes were not taken out of your pay, a formula is used to calculate a lower Social Security benefit.
• For more information, see the Social Security Windfall Elimination Provision Electronic Fact Sheet.

REMEMBER: There are exceptions to these rules. If you have questions, call your local Social Security Administration office.

Copyright (c) 2008 by John V. Tucker and Tucker & Ludin, P.A. All rights reserved. Any content borrowed or referenced from another source is referenced by citation to the original source as noted in the text above.