Can You Explain Social Security Offset?

Video Transcript

Hi, I’m Gracie Ortiz, and I am a paralegal at Calbom and Schwab.

Today I’m here to discuss social security offset. In the state of Washington, if an injured worker is receiving Social Security disability benefits and time
loss or pension benefits under a worker’s compensation claim, typically their benefits will be reduced. When the benefits are reduced, it’s called a social security offset. This amount is calculated by the Department of Labor and Industries using a formula that will determine the maximum amount any injured worker can receive with both benefits combined. The formula is called an ace. The ace is established by taking 80% of one year of the injured worker’s last five years’ highest earnings, or an average of any five years during their lifetime.

The time loss rate is then established by reducing the monthly social security entitlement from the ace. Because it does take some time after the injured worker has started receiving Social Security disability benefits and the social security department is in contact with the department to get the order issued, there is often a period where the injured worker is receiving 100% of both benefits. That entitlement is definitely going to be reduced and there will be an overpayment of benefits.

The department must also not commence the reduction of benefits until 30 days after they have been notified by Social Security that the injured worker is drawing social security benefits.

The overpayment is typically reduced from future time loss and permanent partial disability benefits at a rate of 25% per month. If social security is paying a back period of benefits, where time loss benefits have already been paid, it is typical that Social Security will reduce the social security benefits and LNI will take over the offset from the benefits there forward. Here at Calbom and Schwab, we encourage injured workers who have been off work for a year or believe they will be off work for a year to apply for social security benefits. Your time loss rate may be reduced, but when we take both benefits combined, it is never going to be less than your time loss rate, and may actually be more money in your pocket when you get both benefits combined. Social security also may provide additional benefits such as medical and prescription benefits, which will assist an injured worker in getting unrelated conditions or medical expenses covered. If you receive an order calculating the social security offset and you are concerned with the figures, we would welcome and encourage you to contact our office. And we would be happy to review the figures with you and see if there is some type of assistance we may provide you.