Workers’ Compensation, Social Security Disability Insurance, and the Offset: A Fact Sheet

This article was published in the June 2005 Social Security Bulletin. It was originally part of a policy research seminar co-hosted by the National Academy of Social Insurance and the Social Security Administration (SSA) on June 24, 2004. The seminar, titled Interaction of Workers’ Compensation and Social Security Disability Insurance, brought together experts in both workers’ compensation and disability programs to examine and emphasize the overlap between workers’ compensation and Social Security Disability Insurance. Presenters and discussants at the seminar also proposed policies to improve the coordination and management of workers’ compensation and Social Security for disabled Americans who are eligible for both programs.

This article offers a brief summary of the workers’ compensation and Social Security Disability Insurance programs. Information highlighted includes the differences between the two programs’ types and terms of coverage. It compares the differing patterns in workers’ compensation and Social Security disability benefits as a percentage of wages over the past few decades and considers the potential causes for such trends. The article also explains the offset provision included in the 1965 Social Security Amendments, the intention behind the offset, and how and when offsets are applied.