Workers Comp vs. Disability Benefits: What’s the Difference?

Is there a difference between workers comp and disability benefits?

This is a question that often stops people in their tracks. Indeed, there’s a lot of confusion between workers comp and disability benefits. Some may even think that they’re the same thing but are just called different names.

If you’re also confused between these two, know that workers comp and disability benefits are not the same. Aside from having different purposes, they also have varying eligibility requirements. Each offers different types of benefits too.

To help you understand how they differ, here’s a quick comparison of workers comp vs. disability.

What is Workers Comp?

To put it simply, workers compensation is a benefit paid to workers who got injured on the job. It aims to ease their financial burden while they can’t yet go back to work because of their injury.

Each state has its own workers compensation laws. As such, workers comp rules and regulations tend to vary throughout the country.

Most states, however, require certain types of employees to provide workers compensation insurance to their employees. Otherwise, they can get fined or closed down.

Some states like Dakota and Ohio have state-funded workers compensation systems. Meaning, the workers comp benefits are managed and paid out by the state. But in most states, workers comp benefits are provided by private insurance companies.

What is Disability?

The term “disability benefits” is actually ambiguous. It can mean either the proceeds from a disability insurance policy or the federally-funded benefits you can get from the Social Security Agency (SSA).

This post, however, refers to the latter.

The SSA has two different types of insurance that injured workers can avail of. One is the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).

SSDI pays benefits to people who have paid enough social security taxes. While SSI is a needs-based benefit.

To qualify for SSDI, you must have at least 40 work credits – half of which must be earned in the last 10 years. Though this can be lower if your disability started at an early age.

For SSI, however, your income must be below a certain amount to qualify for benefits. The threshold changes every year. For 2022, the maximum monthly income is $841 for individuals and $1,261 for an eligible couple.

Whichever type of disability benefit you’re applying for, the SSA requires that you have a medical condition that meets their definition of disability.

Workers Comp vs. Disability

From the above definitions, here’s a summary of the difference between workers comp and disability:

1. Only work-related injuries qualify for workers compensation.

Workers comp is only applicable to work-related injuries while you can avail of disability benefits even if the accident happened outside of work.

2. Workers comp requires insurance coverage while disability requires payment of social security taxes.

To claim workers comp, you must have a workers comp insurance provided by your employer. Meaning, your work history won’t matter. Even if you haven’t worked before, as long as you have insurance coverage, you can still apply for workers comp.

With disability benefits, however, your work history will affect your eligibility. If you haven’t worked long enough or in jobs that pay social security taxes, there’s a good chance you won’t qualify for disability benefits.

3. Eligibility for disability benefits is the same across the country while workers comp rules vary for each state.

Since workers comp is administered on a state level, the rules tend to vary for each state. As such, the eligibility requirements also tend to vary.

Disability benefits, on the other hand, are administered by the SSA. It’s funded by the federal government so the rules are the same wherever you might be in the US.

4. Disability benefits are paid once a month while workers comp can be paid weekly, bi-weekly, or monthly.

Because SSA’s disability benefits are federally-funded, the checks are sent out once a month. But workers comp rules vary per state. So the frequency of payment also tends to vary.

5. The workers comp amount is based on average weekly wage while disability benefits are based on lifetime earnings.

In most states, your workers comp benefits will be a certain percentage of your average weekly wage from before your injury.

Each state has different guidelines for calculating the average weekly wage. Though, in most cases, they’ll only take into account the wages you received several weeks before your injury. In Florida, for instance, your average weekly wage is calculated based on your earnings 13 weeks prior to your injury.

Meanwhile, the SSA uses Average Indexed Monthly Earnings (AIME) to calculate your disability benefits. This takes into account your earnings during the entire period that you’re paying social security taxes.

Can You Have Both at the Same Time?

In general, yes, you can receive both workers comp and disability benefits at the same time, as long as you qualify for both.

However, the SSA sets a limit on disability benefit amounts. Your total income each month (including other income) should not exceed 80% of your wage from before your injury. The agency considers workers comp and other public disability payments as part of your income.

So if your workers comp brings your monthly income over the SSA’s threshold, they’ll deduct the excess on your disability benefits.

If you need more guidance on how to avail of both benefits, don’t hesitate to call an experienced workers comp lawyer like Victor Malca. He has already helped thousands of injured workers in Florida get the benefits they deserve. He can help you too. Call us now for a free consultation.

(Related: When Can You Expect The Workers Comp Judge’s Decision?)

VICTOR MALCA – Florida Workers Compensation & Social Security Disability Attorney

Victor Malca P.A. has over 27 years of litigation experience in Workers Compensation and Social Security Disability lawsuits. His experience and continued success when fighting for his clients puts him among the most trusted workers’ compensation attorney’s in Florida. He specializes in representing injured workers on compensation benefit cases and disabled individuals claiming lost social security disability benefits.

Book a free consultation today. Our unwavering advocacy for employee rights and privileges are recognized by our past clients across South Florida.

About The Author

Judy Ponio is a writer and editor for the Victor Malca Law P.A. website and blog. She enjoys helping people in need with questions about social security disability and workers compensation law. She has a passion for helping those in need and the elderly with accurate legal information that can make a positive difference in their lives.