Workers’ Comp and Retirement in Louisiana: Everything You Need to Know
If you are receiving workers' compensation for a work-related injury and are considering retirement, you might wonder, "Can I receive both workers' comp and Social Security?" As a seasoned workers' comp attorney in Louisiana, John Bruscato is an expert in Louisiana workers' compensation laws. As such, he can answer questions about workers' comp and retirement in
Louisiana or about a workers' comp settlement and retirement.
As for the question, can you retire while on workers' comp? The short answer is yes. However, you might also wonder how workers' compensation impacts the amount of your retirement benefits. That answer is more complex. Here's everything you need to know about workers' comp and retirement.
Workers' Comp and Retirement in Louisiana
Louisiana workers' compensation law requires employers to help pay medical expenses and cover lost wages for injured employees. Each person's case and compensation are different.
But what happens if you're receiving workers' compensation and you're going to retire? How do workers' compensation benefits impact Social Security retirement benefits, if at all?
First, the state of Louisiana does not offset its workers' compensation for Social Security retirement benefits. However, workers' comp can affect the amount of Social Security retirement benefits you receive. And workers' compensation benefits can affect Social Security disability benefits. Let's discuss the SSDI impact first.
How Workers' Comp Impacts Social Security Disability Benefits
If an employee receives Social Security disability benefits (SSDI) and workers' compensation benefits, the workers' comp can reduce the amount of monthly SSDI benefits.
In the SSA publication "How Workers' Compensation and Other Disability Payments May Affect Your Benefits," the rules state, "If you receive workers' compensation or other public disability benefits, AND SSDI benefits, the total amount of these benefits cannot exceed 80% of your average current earnings before you became disabled."
To figure your SSDI benefit reduction, add your monthly SSDI benefits, including benefits payable to your family members, to the amount of your workers' compensation or other public disability payment. If this total is more than 80% of your average current earnings, the excess amount is deducted from your Social Security Disability benefit.
How Workers' Comp Impacts Social Security Retirement Benefits
You must earn a minimum of 40 Social Security credits to be eligible to receive Social Security benefits. You earn credits when you work and pay Social Security taxes.
You can earn up to four credits per year. The amount of earnings you need to earn one credit changes every year. In 2023, you must earn $6,560 to earn four max credits for the year.
Under this system, if you get injured and are unable to work before you accumulate 40 Social Security credits, it could mean you're not eligible to receive Social Security retirement benefits at all.
Furthermore, SSA uses a figure called your "average indexed monthly earnings (AIME)" over the whole time that you work to calculate the amount of your monthly retirement benefits. The higher your earnings throughout your lifetime, the higher your Social Security retirement benefits will be. During periods that you stop working or earn less than usual, your benefits are subsequently reduced.
If you're injured at work and are unable to work for months or even years due to your injury and you didn't earn any income, this can also negatively impact your AIME and, consequently, reduce the amount of your monthly Social Security retirement benefits.
These calculations can be challenging to figure out. A knowledgeable workers' comp lawyer in Louisiana, like Bruscato Law Firm, can review the facts and timeline of your work-related injury and help determine if your workers' compensation benefits could potentially decrease the amount of your Social Security retirement benefits.
Photo: via Shutterstock.com
Can You File for Retirement Benefits While You Receive Workers' Compensation?
As long as you're eligible to collect Social Security retirement benefits, you can file for them while you receive workers' compensation. According to SSA rules, you can receive Social Security retirement benefits as early as 62.
Bear in mind that if you start collecting benefits before your full retirement age (which is 67 if you were born in 1960 or after), you'll receive fewer benefits than if you wait until you're 67. For example, if you turn 62 in 2023, your benefit is about 30% less than it would be if you wait until you are 67 to start collecting.
How Long Can You Receive Workers’ Compensation?
Louisiana law requires employers to carry workers' compensation insurance to help pay medical expenses and replace lost wages of injured employees. An employer’s insurance company must continue to pay injury-related medical bills. However, Social Security retirement benefits may impact payment of lost wages in some states.
The extent and duration of your workers' comp benefits depend on the nature of your injury and what it takes for you to fully recover.
If a work injury renders you permanently and totally disabled, and you're offered a lump sum workers' compensation settlement payment, you should also discuss how retirement benefits could impact the settlement amount with an expert workers' comp attorney.
How Bruscato Law Can Help
Figuring out when to start collecting Social Security retirement benefits is a big decision — especially if you're receiving workers' compensation benefits and are unsure how your income will be affected. Plus, Louisiana workers' comp laws are complex, and getting sound legal advice helps ensure you're making the right choices.
Attorney John Bruscato knows Louisiana workers' comp laws inside and out. Many insurance companies don't want to pay injured workers what they deserve. Bruscato is skilled at negotiating with insurance companies and fights to ensure his clients receive all the financial compensation they are entitled to after suffering a workplace injury. Contact Bruscato Law Firm at (318) 855-1613 to schedule a consultation to discuss how we can help.