Can I Get Disability After a Workers' Comp Settlement?

You can get disability benefits after a workers’ comp settlement. The most common benefits you can get are from the Social Security Administration (SSA). You’ll need to prove that you’re unable to work for at least one more year because of your health condition. And since you’ve already visited a doctor — probably several times — as part of your workers’ comp claim, those medical records could make the application a bit easier.

Your settlement may also affect how much you get from disability benefits, since some programs limit your payments if you have certain other sources of income. With that in mind, let’s identify which type of disability benefits you might want to explore and how your settlement could affect them.

Will I get disability after workers' comp settlement?

You won’t automatically get disability benefits after a workers’ comp settlement. You still need to go through the full application process and meet all qualifications of whichever benefits program you’re applying for. Which program you can apply for depends on your situation.

Types of disability benefits

There are a handful of different disability benefits programs:

• Social Security disability programs: The federal government offers Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) to Americans who can’t work because of a disability or medical condition. SSDI pays up to $3,822 per month but you need to have worked and paid taxes for at least 10 full years to qualify. SSI pays up to $943 per month and is an option for people who haven’t worked much or at all, but your monthly income generally needs to be less than about $1,000.

• State disability programs: Five states have their own disability programs — California, Hawaii, New Jersey, New York, and Rhode Island. But even if you live in one of those states, these are all short-term programs that last one year or less. They don’t cover workplace injuries and illnesses that workers’ comp would cover, but may be an option in certain cases after a settlement.

• VA disability benefits: If you’re currently serving or have served in the military, you can work with the U.S. Department of Veterans Affairs (VA) to see if you qualify for VA benefits. That said, to be eligible for benefits, you’ll need to link your injury or illness to your time in service. This might be tricky if your condition was solely caused by a workplace incident.

• Private disability insurance plans: If you purchased a short-term or long-term disability insurance plan, or if you have access through your employer, you should be able to file a claim here. These payments usually max out at 40% to 60% of your former paychecks.

Long story short, unless you have private disability insurance, going through the federal government is probably your best bet for getting disability benefits.

Will my workers’ comp settlement affect my disability pay?

Yes. A workers’ compensation settlement will likely decrease how much you get from SSDI each month, and it may disqualify you from SSI benefits entirely.

SSI and workers’ comp settlements

In many cases, a workers’ comp settlement will be worth enough to disqualify you from SSI benefits. To qualify for SSI, you need to have less than about $1,000 in monthly income and less than $2,000 in savings, property, or other assets (or $3,000, if you’re married). A regular check from your workers’ comp settlement will probably push you over the income limit. A lump-sum settlement payment will probably mean you’re over the asset limit.

SSDI and workers’ comp settlements

Your workers’ comp payments plus your SSDI benefit check can’t exceed 80% of your pre-disability income. Even if you’re otherwise entitled to a bigger SSDI check, the SSA will decrease the amount of benefits you get.

Lump-sum settlements will also affect your SSDI checks, but the math is a little more complicated. In some cases, your settlement contract already includes information on how much your workers’ comp payment is worth on a monthly basis. For example, it could say that your lump-sum payment of $520,000 was based on a rate of $1,000 per week for 10 years.

If that rate information isn’t explicitly called out, the SSA still breaks down your settlement based on your life expectancy and the true value of your settlement (the total amount minus applicable medical expenses and lawyer fees). The SSA figures out how much your settlement is worth per month and that’s the amount used to keep your SSDI check under the 80% income threshold.

Unsure whether you could qualify? Start with our free SSDI eligibility quiz and our team can help you understand what benefits you could get.

Types of payments that affect your disability check

Beyond workers’ comp, other payments can impact your SSDI payment. The SSA also applies the 80% pre-disability income limit to a handful of other types of benefits:

• Workers’ compensation

• Civil service disability benefits

• Short-term state disability benefits

• State or local government disability-based retirement benefits

There are some instances when the 80% limit doesn’t apply. Specifically, the SSA doesn’t count:

• Private disability benefits (like through your employer’s insurance)

• VA disability benefits

• SSI

State and local government benefits if Social Security taxes were deducted from your earningsQualifying for SSDI or SSI can get pretty complex. For help with the application, find a disability lawyer near you. (Lawyers also don’t get paid until after you actually get benefits, so there are no upfront costs).

How to apply for federal disability benefits

If you’re interested in applying for disability benefits after you settle your workers’ comp claim, we have a thorough guide you can follow. To give you a brief overview, though, you need to:

• Make sure your medical condition is eligible: Eligible health conditions are diagnosed by a doctor (the diagnosis from your workers’ comp case counts), will last for at least 12 months if not the rest of your life, and are serious enough that you can’t work.

• Make sure you’re eligible. There are technical requirements you need to meet. SSI has strict income and asset requirements, while SSDI has clear work history requirements. You can explore eligibility requirements here.

• Get your paperwork together. Good news: the medical records from your workers’ comp should help here. You likely already have clear and extensive medical records from a doctor, which is a big plus. Get those medical records plus any other applicable ones, along with details about your work history (for SSDI) and your current income (if any). The SSA might also ask to see documentation like your financial records and your educational records, so make sure you have easy access to key paperwork.

• Fill out the application. Whether you’re applying for SSDI, SSI, or both, you’ll use the same application: Form SSA-16. A disability lawyer can help you fill out the application and navigate any necessary appeals.

• Be ready for appeals. It usually takes about two years to get approved for disability benefits. Unfortunately, most people who apply get denied at first and need to appeal. Luckily, your odds of approval increase after a couple rounds of appeal. Applicants with a disability lawyer also get approved three times as often.

Ultimately, getting federal disability benefits is almost never a quick or easy process. But two things help: the medical evidence you already have on file from your workers’ comp claim and a good lawyer.

Whether you’re applying for the first time or you’ve already been denied, you can take this quick quiz to get connected to a vetted disability lawyer.