Disability Retirement for Federal Government Employees: FERS & SSDI Offset

This information has been concurrently posted on the “forum” concerning FERS & CSRS Disability Retirement, because it is a pending issue which may impact many (former) Federal and Postal employees who are receiving both FERS Disability Retirement benefits as well as SSDI, and impacted by the offset between the two.  

Under FERS, you must file for Social Security Disability benefits.  However, everyone should be aware of two basic (potential) problems:  (1)  There is a much lower “cap” under SSDI as to what one can earn in income and (2) There is an offset between FERS Disability annuity and SSDI (100% the first year, 60% every year thereafter).  Further, as SSDI has a higher and more restrictive standard of proof (generally, one of “total disability” as opposed to being disabled from being able to perform all of the essential elements of one’s job), most Federal and Postal employees will not qualify for SSDI, and so it is not an issue.  

However, every Federal and Postal employee should be aware of the following:  If a Federal or Postal employee becomes qualified for both SSDI and FERS Disability retirement, and receives the joint annuities from both sources, and if at a later time he/she exceeds the income cap as set by SSDI and loses the SSDI benefit, one would presume/assume that since the source of the offset is lost, that OPM would reinstate the full FERS Disability annuity amount.  Not so.  There is a legal distinction being made by OPM between being “eligible” and being “entitled”, and the fact that one is no longer “eligible” does not mean that one is not “entitled”, and therefore no reinstatement of the full annuity is made.  

A couple of cases are presently be appealed to the 3-Judge panel at the MSPB, and a decision is forthcoming any day.  If favorable, good for everyone.  If not, then an appeal to the U.S. Court of Appeals for the Federal Circuit will be entertained.

Knowing what the law says is the key to proper preparation in any event, and regardless of what the outcome of the case will/may be, knowing the law will allow for all recipients of a FERS Disability Retirement annuity to adequately prepare and to act accordingly.

Sincerely,

Robert R. McGill, Esquire

Federal Disability Retirement: FERS & SSDI

Of course one must file for SSDI (Social Security Disability benefits) when a Federal or Postal employee under FERS (the Federal Employees Retirement Systems, as opposed to CSRS, the Civil Service Retirement System) files for Federal Disability Retirement benefits.  If approved by Social Security, there is a 100% offset of benefits in the first year, and a 60% offset of benefits every year thereafter until age 62.  The real underlying question for most people, is how aggressively one should, or one wants to, pursue Social Security benefits.  This is often determined by what one plans to do after becoming a Federal Disability Retirement annuitant.  For, if you plan to work part or full time, and think that you will be earning more than the yearly ceiling allowable under SSDI, which is around $12,000.00 per year, then it is probably not worthwhile to pursue it very aggressively.  On the other hand, if you plan on relying exclusively on your disability annuity, it is probably a good idea to pursue it with the intent of obtaining it. 

Sincerely,

Robert R. McGill, Esquire