Disability Retirement for Federal Government Employees: Different Pockets

There is often a confusion over different pockets and their intersecting relations — of SSDI (Social Security Disability Insurance with the Social Security Administration); OWCP administered under the Federal Employees’ Compensation Act (OWCP/FECA); Federal Disability Retirement under FERS or CSRS, as approved or denied by the U.S. Office of Personnel Management; and, in addition, there are those who are eligible for VA Disability benefits, for a Scheduled Award from OWCP, and complications which can occur with private disability insurance policies.

The general rule with respect to each can be summarized as follows:  Offset between FERS & SSDI (100% the first year, 60% every year thereafter); one can get approved concurrently for OWCP/FECA, but the Federal or Postal employee must choose to receive from one or the other, and not both; the Federal or Postal employee can receive a scheduled award while at the same time receiving a FERS Disability Retirement annuity, because a Scheduled Award is considered compensation for a rated injury, as opposed to continuation of one’s pay; there is no offset between FERS or CSRS Disability Retirement benefits and VA Disability benefits; private disability policies depend upon the contractual language of the policy itself, and must be reviewed individually as to any provisions of offset or dollar-for-dollar reduction of benefits based upon receipt of any other benefit.

These are the general criteria concerning the intersecting impact of each upon the other.  In the end, reaching into different pockets will normally result in an increase, and rarely (if ever) a decrease of benefits, even with offsets.  However, overreaching, as the case may be, can result in unintended consequences of overpayment and required repayment.  Be aware and informed.

Sincerely,

Robert R. McGill, Esquire

OPM Disability Retirement: Intersection with Other Benefits

Federal Disability Retirement benefits under FERS or CSRS from the Office of Personnel Management is an independent benefit from an independent agency.  However, there may be some intersecting features which are important to understand, prior to beginning the process.  

A disability annuity, whether under FERS or CSRS, has an “off-set” feature with certain other federal annuities, by statutory mandate and direction, but not with certain others.  For instance, there is a coordinating offset with Social Security Disability (under FERS), and an election must be made between OWCP Temporary Total Disability payments and Federal Disability Retirement benefits (except for scheduled awards).  On the other hand, there is no offset between a Federal Disability Retirement annuity and VA disability payments.  

In making a decision as to whether to file for Federal Disability Retirement benefits, each Federal and Postal employee should be fully informed as to the offsets with other Federal benefits and payments, as well as whether there are limits and restrictions as to the amount of other “earned income” a person may be allowed to make.  

The importance of finding out which benefits are fully or partially offset is important in making a final decision as to whether it is financially feasible to proceed in preparing, formulating and filing a Federal Disability Retirement application.  Of course, in the end, it is usually a medical decision which is paramount — out of necessity, and not out of choice– as opposed to a financial one.  However, it is nevertheless important to know what is on the other side of the cave, before one enters it to begin with.

Sincerely,

Robert R. McGill, Esquire