FERS & CSRS Disability Retirement: Back-Pay

Remember to not spite yourself, especially when it comes to financial considerations. If your medical disability is forcing you to take excessive LWOP, it might be better to go “cold turkey” and stay completely out on LWOP while you file for disability retirement benefits. This is because, once you get your disability retirement application approved, you will be paid “back pay” in a lump-sum form, back to the last day of your pay, at the 60% rate from your last day of pay forward for the first 12 months.

Thus, if you work only 2 days out of the week, and you take LWOP for the other 3 days, you are losing 20% of pay, because were you to go out on LWOP, instead of being paid 40% of your salary (2 out of the 5 days), you would be getting back-pay for essentially 3 out of the 5 days (60%). On the other hand, don’t go out on LWOP, then after 4 or 5 months, go back to work for a week — because in that instance, you will never recover the 4 or 5 months of LWOP, because the “last day of pay” will have been paid to you when you went back to work. While all of this may be a bit confusing, it is essential to your financial health and consideration when entering the complex process of Federal Disability Retirement under FERS or CSRS.

Sincerely,

Robert R. McGill, Esquire

3 Responses

  1. I retired from US Army CID in Jun 2008, where I worked as a civilian Polygraph Supervisor at Ft Hood, TX. I retired due to my psychiatrist and psychologist at the Waco VA Office determining that I should go on terminal sick leave and I was also listed by my VA Doctor as being unemployable due to Service Connected PTSD issues. I was recently determined by the VA to be 100% disabled and unemployable. After that long, can I now apply for disability pay due to the aforementioned conditions?

  2. Does the “last day of pay” include emergency withdrawal from the Thrift Savings Plan? In other words, if LWOP started on 2/15/2015 but I withdrew from TSP on 6/15/2015 then does my FERS Disability Retirement back pay start from 2/15/2015 or 6/15/2015?

  3. I worked for the Agency under a Law Enforcement Officer covered position in excess of 10 years until I filed an EEOC violation claim then was terminated. I was not covered under MSPB jurisdiction. The OPM awarded me an Disability retirement effective the day after my termination date of which In an award of back pay by the EEOC is returned/refunded back to OPM. In my award, EEOC orders 10 years front pay to age 57 and the Agency deducts my retirement contributions from both front and back pay does the OPM recalculate my annuity based on my high average 3 years when payment of $1.6 million in earnings is paid in 1 year to cover 4 years back pay and 10 years front pay?

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