Medical Retirement Benefits for US Government Employees: 80% Rule

Around this time of year, the U.S. Office of Personnel Management sends out their Disability Earnings Survey to all Federal and Postal Disability Retirement Annuitants, to determine what earned income was obtained by the Federal or Postal Annuitant.  It is a simple form and should be completed and returned, and will not impact one’s Federal Disability Retirement benefit so long as one has remained under the 80% cap.

Now, as to determining how the Office of Personnel Management determines what is the “true” 80% cap, is another matter.  There have been wide discrepancies between OPM’s determination and the Federal or Postal annuitant’s assertion as to what the “current pay” of a former position is, or should be.  That is entirely a different area of law which the undersigned writer does not become involved in.

However, the wisest thing to do, unless one desires to become engaged in a continuing, protracted battle with the Office of Personnel Management, is to calculate the amount as conservatively as possible, and to take the lower amount and remain well under 80% of what one’s former position currently pays.  While this is sometimes difficult, remember that the benefits of retaining one’s Federal Disability Retirement annuity — of continuing Health Insurance Benefits, to name one — makes it worthwhile.  For, ultimately, one is potentially making 120% of what one was making before (80% of what one’s former position currently pays, plus the 40% of annuity).

Stay close to making 100%, if possible, and that will avoid future headaches.


Robert R. McGill, Esquire