Disability Retirement for Federal Government Employees: Life after Disability Retirement

The focus upon the “now”, of course, can not be avoided; for the “now” constitutes the present circumstances, the period of preparing, formulating or filing for Federal Disability Retirement benefits from the U.S. Office of Personnel Management; where the medical condition impacts and prevents one from performing one or more of the essential elements of one’s job; where the severity, chronicity and extent of the persistent pain, the overwhelming psychiatric infringement upon one’s ability to focus, concentrate, etc.; or where the ability to have the sustained stamina and daily energy has been depleted to such an experiential phenomena that the very “now” is all that one can focus upon.

There is, however, indeed a life after Federal Disability Retirement, and as much of the administrative process of obtaining the benefit is a long and arduous waiting period, it is beneficial to consider what will happen, what one will do, can do, etc., once an approval is obtained from the U.S. Office of Personnel Management.  Remember, in being approved for Federal Disability Retirement benefits, one can go out and earn up to 80% of what one’s former salary pays currently.

Further, this is not OWCP — where, if one is receiving temporary total disability compensation, you cannot work at all (there are some minor exceptions under FECA/OWCP rules, such as if you were working at another part-time position of a different nature prior to the accepted date of injury, you may be allowed to continue to work that “other” job, etc.).  Nor is this SSDI, where there is a severe cap on the limit of what one may earn (although, if one is getting FERS Disability Retirement concurrently with SSDI, then there is an offset between the two).

The period of waiting can be a fertile time of preparation for life after an approval.  Or, such future plans can be placed on temporary hold for purposes of using the time for recuperative rest.  In any event, the “now” is merely a passing time of fleeting moments, as a cherry blossom withering in the early morning dew as the sun begins to rise.

Sincerely,

Robert R. McGill, Esquire

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.

Sincerely,

Robert R. McGill, Esquire

Federal Disability Retirement: The 80% Rule and Other Considerations

In preparing, formulating and filing a Federal Disability Retirement application under FERS or CSRS, it is always the future which one must plan for — the short-term future of obtaining Federal Disability Retirement benefits from the Office of Personnel Management; the intermediate future of adjusting to the monetary reduction; the longer-term future of planning for another career, to supplement the income from one’s Federal Disability Retirement annuity.

As to the last factor, the “80%” rule must always be adhered to — that while FERS & CSRS Disability Retirement allows for a person to work in the private sector and make up to 80% of what one’s former position currently pays, the greater question often involves:  Doing what?  Federal and Postal workers who have worked in the Federal Sector have done so to perfect all of the skills and knowledge for a particular career path.  As such, as with most individuals, to become “disabled” from being able to perform one or more of the essential elements of one’s job is devastating not only financially, but moreover, the impact is upon one’s “life work” in so many other ways — upon one’s identity, which is bundled up so intimately in one’s career and work.

Can an injured or partially disabled Federal Employee who has been approved for Federal Disability Retirement benefits under FERS or CSRS go out and obtain a State, County or City job, or one in the private sector, which is similar to one’s former Federal job?  The general answer is “yes” — so long as one adheres to the 80% rule, and so long as the “essential elements” which you could not do, are not required in the new job.  The trick is to differentiate and justify the distinction, and such differentiation and justification can involve both medical and legal issues which should be addressed prior to acceptance of the new non-Federal job.

Sincerely,

Robert R. McGill, Esquire

Disability Retirement for Federal Workers: The Benefit Needs No Apology

A Federal Disability Retirement annuity under FERS or CSRS allows one to receive an annuity because the Federal or Postal employee is no longer able to perform one or more of the essential elements of one’s job.  

Under FERS, while the Federal or Postal employee is required to apply for SSDI to determine if one is concurrently eligible for that benefit (and, if one is, to have an offset between SSDI and FERS), most Federal and Postal employees fail to qualify for SSDI precisely because he or she is not “totally disabled” (the general legal standard for SSDI eligibility), but merely unable to perform one or more of the essential elements of one’s particular Federal or Postal job.  

This allows for two consequential benefits which help both the society at large as well as the individual Federal or Postal employee:  It allows the individual to have the necessary time for recuperation and healing from one’s medical conditions, and further, it provides for the former Federal or Postal employee to seek other employment in the private sector, and be able to make up to 80% of what one’s former Federal or Postal position currently pays.

Thus, many Federal Disability Retirement annuitants go on to become employed, productive and tax-paying individuals, contributing to the very tax-base which pays for the Federal Disability Retirement annuity.  It is, in many ways, a “pay-as-you-go” system, and is self-sustaining precisely because it is not purely benefit-dependent, but has a great percentage of benefit-recipients actually paying back into the system.  

As a social policy, it is an inherently intelligent system, and requires no apologies for its intelligent design.

Sincerely,

Robert R. McGill, Esquire

OPM Disability Retirement: The 80% Rule — Earned Income

As we reach the end of the year, Federal and Postal employees who are receiving OPM Disability Retirement benefits, and who are working in the private sector, should remember the 80% earned income rule.  Be aware that a Federal or Postal employee who is under FERS or CSRS, and who is receiving a Federal Disability Retirement annuity, is allowed to make up to 80% of what one’s former position currently pays.

While it is sometimes difficult to ascertain what the current pay scale is (and the Office of Personnel Management is often completely unhelpful, whether deliberately or inadvertently), it is best to always estimate “down”, so that one is never in danger of exceeding the cap.  Further, if the Federal or Postal employee in any given year exceeds the cap, then reinstatement of the Federal Disability Retirement annuity is allowable if in any succeeding year, he or she goes back under the 80% ceiling.

It is important to keep an eye on one’s earned income if one is to continue to maintain a Federal Disability Retirement annuity.  Planning is the key to the entire process.

Sincerely,

Robert R. McGill, Esquire

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

CSRS & FERS Disability Retirement: The 80% Rule

I recently wrote an article on FedSmith.com concerning the legal process of filing for Federal Disability Retirement benefits under FERS or CSRS, and a reader posted a comment implying and suggesting a lack of understanding about a benefit which would allow for payment of 40% of the average of one’s highest three consecutive years, and in addition, to allow for that annuitant to make up to 80% of what the former federal position currently pays.

I beg to differ. The purpose of allowing an annuitant to potentially go out and earn additional compensation in the private sector are multi-fold: it allows for an individual to remain productive; he or she continues to contribute in the workforce and, as a consequence, pays taxes, FICA, etc.; the amount of 40% (after the first year) is an incentive to go out and do something else. Further, Federal Disability Retirement benefits are part of a compensation package offered to a Federal or Postal employee — it is part of the total employment package, and there is certainly nothing wrong with taking advantage of that employment benefit if and when the need arises. The truth is that most people don’t get anywhere near the 80% mark, but hover closer to the 40 – 50% mark, and together with the disability annuity, are able to make a decent living. All in all, the 80% rule is a smart and thoughtful incentive for those who are disabled.

Sincerely,

Robert R. McGill, Esquire

OPM Disability Retirement: Always the Long Term

Always remember that Federal Disability Retirement under FERS or CSRS must be looked at for “the long term”.  Even after one obtains and secures the benefits under Federal Disability Retirement (annuity, health insurance, etc.), one must always be vigilant in protecting the benefit — for you can always be selected randomly to answer a Medical Questionnaire.  I often tell my clients after securing an approval for his or her Federal Disability Retirement benefits, that now that you have it, you will never lose it unless you are “stupid”.  By “stupid”, I do not mean that it is impossible to lose it; only that you must be either recklessly careless, or thoughtless, in losing the benefit. 

There are different ways of losing the benefits received under Federal Disability Retirement:  the two most commons ways are —  making more than the allowable 80% of what your former job currently pays or failing to properly answer the Medical Questionnaire.  The former needs constant and careful planning when you get a job; the latter requires that you carefully monitor the answers provided by your treating doctor.  Whichever the case may be, it is important to take any correspondence received from the Office of Personnel Management seriously — whether before, during, or after the process of obtaining Federal Disability Retirement under FERS or CSRS.

Sincerely,

Robert R. McGill, Esquire

OPM Disability Retirement: The Freedom of Retirement

In this tough economy, many people are rightly concerned that, upon an approval for Federal Disability Retirement under FERS or CSRS, that it will be difficult to “make up” the income with another job, even though a person under Federal Disability Retirement can earn up to 80% of what one’s former Federal or Postal position currently pays.

Yes, it can be tough; yes, the economy is a concern; but recessions ultimately come to an end, and while a job to make up the severe pay-cut may be long in coming, self-employment, to begin a start-up business, or to work part-time is often an excellent opportunity.

Unlike having the larger percentage of pay under OWCP-DOL benefits, a disability retirement annuity under FERS or CSRS is indeed a greater pay-cut.  But salary is not everything; the freedom of retirement, the ability to determine one’s future, and not be under the constant and close scrutiny of Worker’s Comp, accounts for much.  Where some see a severe pay-cut, others see as an opportunity to begin a second career.  And the price of freedom from those onerous fiefdoms of federal agencies is often better health, and greater enjoyment of one’s freedom and retirement.

Sincerely,

Robert R. McGill, Esquire

CSRS & FERS Disability Retirement: The Initial Step Is the Most Difficult

I find that the initial step in filing for Federal Disability Retirement is the most difficult step for people to take.  It is often a psychological block.  I have spoken on this issue in the past.  For a Federal or Postal worker, especially in these constrained economic times where the job market outside of the Federal Sector appears restrictive, at best, the pressure of one’s medical conditions and the impact upon one’s job, results in an anxiousness when it comes to filing for federal disability retirement under FERS or CSRS.  Certainly, it is a significant pay cut.  Certainly, it is a worry that — although one may be able to make up to 80% of what one’s (former) Federal salary currently pays — it may be that the private sector may not offer the opportunities to make up the difference in the pay cut.  Yet, the choices are often stark and untenable; for, at some point, it becomes clear that one’s medical conditions prevents one from performing the essential elements of the job. 

As such, the only and best choice is to move forward:  in fact, even in this economy, creativity will be rewarded.  Private companies actually find independent contractors who carry his or her own health insurance a plus; part-time work is offered more readily in a bad economy precisely because it allows for companies to obtain necessary work and skills without having to pay the “extra” benefits.  The initial step is the most difficult; after stepping beyond the difficulty, Federal and Postal workers who obtain disability retirement benefits find that there is a different and better future — even in this economy.

Sincerely,

Robert R. McGill, Esquire