New Jersey Workers’ Compensation Benefits Offset Social Security Disability Payments
Some workers who are eligible for workers’ compensation benefits may also be qualified to receive Social Security disability payments. However, New Jersey law prohibits these workers from receiving the full amount of both benefits at the same time in order to prevent the employee from collecting more money while disabled than while working. The total benefits from both resources cannot exceed 80% of earnings prior to disability.
If you have a work-related illness or injury and qualify for both Social Security disability benefits and workers’ compensation, you should first consult with a worker’s compensation attorney in New Jersey prior to filing your claims.
New Jersey Is a “Reverse Offset” State
New Jersey is considered a “reverse offset” state with regard to offsetting both Social Security disability and workers’ compensation benefits. Under New Jersey law, if you are eligible for both Social Security disability benefits and temporary or permanent partial disability benefits, the Social Security Administration gets the offset.
On the other hand, if you are entitled to permanent total disability benefits, the workers’ compensation carrier holds the right to offset the amount of Social Security payments.
Calculation of the offset is not an easy task. Your worker’s compensation attorney in New Jersey must have knowledge of both the workers’ compensation rate, as well as the workers’ initial entitlement rate and “CAP” on benefits. The latter information can be obtained from the Social Security Administration.
Exceptions to Social Security Offset
Although New Jersey Workers’ Comp laws do not consider settlement claims under section 20 (short for N.J.S.A. 34:15-20) to be compensation benefits, the Social Security Administration has been able to successfully offset these settlements under the theory that they are in fact compensation benefits subject to proration.
On the other hand, there is no Social Security offset for money received by a worker pursuant to section 40 (short for N.J.S.A. 34:15-40) because benefits received after a section 40 lien is considered a reimbursement for attorney’s fees, not workers’ compensation benefits.
If you are entitled to both workers’ compensation and Social Security disability benefits, you will not get the full benefits from both resources. This may be very confusing for even the most experienced claimants.
Dan Matrafajlo, a worker’s compensation attorney in New Jersey, can provide you with more information or answer any questions you may have. To schedule a free consultaiton, call the Law Offices of Dan T. Matrafajlo at (908) 248-4404.