Federal Worker Disability Retirement: The 80% Rule

When a Federal or Postal employee files for Federal Disability Retirement benefits, and obtains an approval from the Office of Personnel Management, under FERS he or she will receive 60% of the average of one’s highest three consecutive years of pay, then 40% every year thereafter until age 62, at which point the disability annuity is recalculated based upon the total number of years of Federal Service, including those years that the disability retirement annuitant has been on Federal Disability Retirement.  Thereafter, the now “former” Federal or Postal employee has the capability to work at another, private-sector job, and earn up to 80% of what one’s former Federal or Postal job currently pays, on top of the disability annuity that one is receiving.

While some may wonder whether this is a “fair” benefit, especially in these trying economic times, it might be wiser to consider whether or not it is prudent to consider the economic incentives inherent in such a system.  For, by allowing for the Federal or Postal Disability Retirement annuitant to go out and attempt to earn income in another, different kind of job, it allows for continuing productivity, payment of taxes and FICA back into the “system”, as opposed to limiting the individual to merely receiving a government benefit. As all of “economics” is ultimately based upon incentives to the working population in order to encourage a system of the highest extent of productivity, this system creates an economic incentive to those who are merely disabled from performing a certain kind of job.  They can continue to remain productive — just in a different kind of job from the one in which he or she is disabled.

Sincerely,

Robert R. McGill, Esquire

OWCP versus OPM Disability Retirement

I still get periodic telephone calls with much misinformation, mixing terms applied to FERS & CSRS Disability Retirement with “Department of Labor Retirement” or Worker’s Comp retirement.  While there are indeed people who remain on OWCP temporary total disability for years and years, OWCP/DOL is ultimately NOT a retirement system.  It is a system meant to pay for injured Federal and Postal workers while he or she is recuperating from an on-the-job injury.

The Department of Labor thus does everything in its power to get the injured worker back to work, by various means:  assigning a nurse to “oversee” the treatment and “progress” of the worker; by sending the injured worker to second opinion doctors to see if there is a medical opinion different from one’s treating doctor; and other means which have nothing to do with the patient’s best medical interests.

I don’t handle OWCP issues; however, because many individuals who file for Federal Disability Retirement benefits under FERS or CSRS have intersecting OWCP issues, also, I have some “on the job” knowledge of such issues.  Ultimately, a worker must decide between the two systems, although one can file for both benefits concurrently, one can only receive from one or the other — not both at the same time.

Sincerely,

Robert R. McGill, Esquire