The compensation package given in your workplace is very important and will come in handy in case you get any work-related injury. However, in many scenarios, compensation laws tend to favor the employer and can easily affect you as an employee, and that is why it is important to seek consultation before retiring. Attorneys want to help you receive benefits and compensation from the insurance company should you choose to resign or retire. Here are five ways workers’ compensation can impact your retirement.
Workers’ compensation can reduce Social Security benefits
If you receive both your Social Security disability benefits and workers’ compensation in a lump sum which is more than 80 percent of your earnings then the Social Security benefits can reduce in a process known as offsets. Fortunately, attorneys want to help you to eliminate or reduce these offsets by excluding any past or future medical costs, vocational rehabilitation expenses or attorney fees that are in the lump sum. You can obtain the reduction by breaking down the payment according to your life expectancy.
When your injury is unrelated to Medicare
Retirement benefits will be affected when Medicare refuses to cover the cost of workers’ compensation injury. Attorneys want to help you secure the benefits by obtaining a Medicare Set Aside (MSA) which will ultimately pay for any future injury-related treatment regardless of the extent of the injury.
When a worker is enrolled in a pension program during the time of injury, when he or she retires due to a work injury, in some cases, pension payments can be affected. This is because an employer will credit the payments against the compensation benefits owed.
Compensation settlements for workers if paid under the Workers’ Compensation Act are fully tax exempt. However, this exemption does not cover employees who receive Social Security Disability Insurance as their workers’ compensation will have to be taxed.
Trends in disability benefits and workers’ compensation
Trends in workers’ compensation benefits keep on changing. In the 1970s, compensation benefits were less than Social Security benefits. The opposite has been the case in the last 25 years. With laws changing you need to have a professional who will use the knowledge to protect your welfare.
Workers’ compensation and disability benefits vary from state to state. However, attorneys want to help you understand the rules and regulations in your jurisdiction and ensure that your compensation will not impact your retirement negatively.
Author Harper Harmon is a freelance writer and blogger who focuses on business, health and other various topics. She graduated with a bachelor’s degree in communication from UCLA and currently resides in Santa Cruz with her dog, Sassy.