FERS/SSDI Offsets: Major Precedent-setting Case

For those FERS Disability Retirement annuitants who are/were concurrently receiving SSDI benefits, and have gone out to earn more income — there is good news.

In the past, if you exceeded the allowable income-ceiling, you would lose your SSDI benefits because you engaged in substantial gainful activity.  With no longer receiving SSDI benefits, the FERS annuitant would go to OPM and request that the Disability Retirement annuity be “recalculated”, because he/she is no longer receiving the SSDI offset amount.

In the past, OPM has consistently (and now, wrongly, it turns out) argued that, because such an individual continues to remain “entitled” to SSDI benefits (even though he/she is not receiving any such benefits), that therefore OPM is not required to recalculate the FERS disability retirement annuity upwards for the benefit of the FERS individual.

No longer.

The U.S. Court of Appeals for the Federal Circuit just issued the opinion in Stephenson v. OPM, Case #2012-3074, in which they have clearly and unequivocally stated that OPM’s interpretation of the law has been in error.  When a FERS disability retirement annuitant loses his or her SSDI benefits for engaging in substantial gainful activity, OPM must recalculate the FERS disability retirement benefit.

I argued the case in early December; the Court issued its precedent-setting opinion in just over a month.  This is indeed a major victory for FERS annuitants.  You can now take this case and wave it at OPM and demand that your Federal Disability Retirement annuity be recalculated — in your favor.

Sincerely,

Robert R. McGill, Esquire
Attorney Robert R. McGill Reviews from former clients

Federal Employee Medical Retirement: FERS & SSDI Offset

In preparing, formulating and filing for Federal Disability Retirement benefits under FERS, an additional component must be satisfied (CSRS is exempted):  filing for Social Security Disability benefits.  

In doing so, various factors need to be taken into account:  Whether the Federal or Postal employee intends to work at another job while receiving FERS Disability Retirement annuity; the chances of actually succeeding in applying for SSDI; and further, a future consideration — if one gets approved for SSDI and FERS Disability Retirement, but later is dropped from the Social Security annuity, will the Office of Personnel Management recalculate the FERS Disability Annuity?  

This is a question which has been appeal to the Full Board of the Merit Systems Protection Board, and thus far, the Full Board has ruled in favor of OPM, that OPM’s interpretation of the statutes, rules and laws governing SSDI/FERS Disability Retirement offset is “reasonable”, where loss of entitlement to the former does not require recalculation despite the fact that the former Federal or Postal employee no longer receives Social Security Disability benefits.  

An appeal is likely to the Federal Circuit Court of Appeals.  The bright spot is that there was a dissenting opinion by one of the Board Members.

Fortunately, most people do not qualify for SSDI, anyway, and so it does not widely impact most Federal or Postal employees who file for Federal Disability Retirement benefits under FERS.  Information and updates to follow.

Sincerely,

Robert R. McGill, Esquire