Federal Employees Retirement System (FERS) Disability Retirement: Further SSDI Considerations

In filing for Federal or Postal Disability Retirement under FERS, one must, of course, file for SSDI.  Whether you want to pursue SSDI aggressively or not, depends upon what one’s future plans will be.  Remember that you can make (in addition to the disability annuity paid) up to 80% of what one’s former Federal or Postal job currently pays. 

Thus, take the following hypothetical:  An individual makes $60,000.00 per year, and files for Disability Retirement under FERS.  In the first year, the individual’s annuity would be $36,000; and every year thereafter, it would be $24,000.00.  On top of that annuity amount, however, the former Federal or Postal employee could go out and become employed, and make up to $48,000.00 per year at another job, on top of the $24,000.00 in disability annuity, for a combined income of $72,000.00. 

Now, some might be critical of the fact that under the rules governing OPM Disability Retirement, one can actually make more total income — 120% — than before becoming qualified for FERS Disability Retirement.  Some have called this a “windfall”.  Instead, one should look at it this way:  it is a thoughtful paradigm, because the system encourages a person to become productive in some other capacity.  Moreover, that person further contributes to the system which he or she left, by paying Federal taxes through the “other” employment.  Incentives work, and in this case, it makes economic sense for both the Federal government and for the disabled former federal or postal employee.

Sincerely, Robert R. McGill, Esquire

FERS & CSRS Disability Retirement: Considerations Prior to Pursuing SSDI Aggressively

In filing for Federal Disability Retirement benefits under FERS, one must file for SSDI and submit proof of such filing with the Office of Personnel Management at the time of approval of the Federal Disability Retirement application.  For CSRS individuals who file for Federal Disability Retirement, no such filing is required, precisely because the framework of a CSRS retirement/disability retirement is not tied into the Social Security system. 

Remember that, under FERS, when a Federal or Postal Worker files for Federal Disability Retirement benefits, all that is necessary is to fulfill the requirement of “filing” — meaning, that a receipt must be submitted evidencing the filing of an SSDI application.  One does not need an approval or a denial — merely a receipt showing that one has fulfilled the statutory requirement of filing.  Ultimately, of course, the Office of Personnel Management is seeking to discover whether or not the Federal or Postal worker is eligible for SSDI, and if so, that an offset will be triggered.  Because of the possible offset (and the potential repercussions of OPM refusing to reinstate the full FERS Disability Retirement benefits in the event of an SSDI/FERS disability retirement annuitant having reached a status of gainful employment — see my previous blog post), one needs to take into consideration all of the factors, circumstances, future goals and future plans, before one decides to “aggressively” pursue SSDI benefits.  

Sincerely,

Robert R. McGill, Esquire

Federal Employees Retirement System (FERS) Disability Retirement: SSDI & FERS Offset (Continued…)

If a former Federal or Postal employee receives both FERS Disability Retirement annuity, as well as SSDI (with the proper offset), and finds a job, makes sufficient income to exceed the cap for SSDI — to the extent that Social Security finds that he or she is no longer “entitled” to SSDI benefits and suspends SSDI payments:  will the Office of Personnel Management recalculate the FERS Disability Retirement and reinstate the amount which was previously offset, to restore the full FERS Disability Retirement annuity?  The answer:  A number of recent cases have resulted in a “No”.  Petitions and Appeals are in the works. 

The reasoning and rationale of the Office of Personnel Management is that, because the individual is still “entitled” to SSDI benefits, but the benefits have merely been “suspended”, therefore the FERS Disability Retirement annuity is still offset by the “entitled” amount, not by what is actually received.  Pending the outcome of any Petitions for Review and Appeals to the U.S. Federal Circuit Court of Appeals, Federal and Postal Disability Retirement annuitants must be careful in deciding whether or not to actually pursue SSDI.  If one is planning to work at another job, with a reasonable expectation of exceeding Social Security’s cap for employment income, the fact that if one is restored to earning capacity, one’s FERS Disability Retirement may not be allowed to be recalculated to make up for the lost offset, should be taken into consideration.

Sincerely, Robert R. McGill, Esquire

FERS Disability Retirement: SSDI & FERS Offset

Federal and Postal Disability Retirement annuitants under FERS were required to file for SSDI as part of the process.  Most Federal and Postal employees who filed for Federal Disability Retirement benefits under FERS, never obtain an approval for SSDI.  This is natural, of course, and is part of the overall “framework” of the interaction between FERS Disability Retirement benefits and SSDI.  FERS Disability Retirement (as well as CSRS Disability Retirement) encourages Federal and Postal Workers to become employed in the private sector, and to become “productive” (translation:  continue to pay more taxes) in some other area of employment. 

Because Disability Retirement benefits under FERS or CSRS does not pay a great amount (60% of the average of one’s highest three consecutive years the first year under FERS, and 40% thereafter; a different computation methodology for CSRS employees, who are becoming rarer each year), the paradigm and plan of the Federal payment system for Disability Retirement annuitants had an implicit public policy approach of “encouraging” all such annuitants to find other employment.  Unless, of course, in addition to the FERS Disability Retirement annuity, one became entitled to SSDI payments, in which case the “cap” for income from other employment becomes much, much lower.  Many considerations should be thoughtfully approached when filing for SSDI, including plans for future employment.  Otherwise, some problems may be encountered if the annuitant receives both FERS Disability Retirement benefits, SSDI, and exceeds the cap from other employment.  More to Follow.

Sincerely,

Robert R. McGill, Esquire