Q. I receive Social Security Disability and Workers Compensation. Workers Comp has refused/delayed authorizing treatment and prescriptions. Therefore, I am considering requesting a settlement instead of the monthly checks. I am completing a 6-week clinical program. I have been told that there is no cure for my condition and I can self-manage it without Doctors, etc. They have done all they can. Will a Workers Compensation settlement offset my Social Security Disability? Will it affect my Medicare? Many thanks.


A. How a lump sum Workers Compensation settlement affects Social Security depends on the nature of the settlement. Compensation for lost wages affects Social Security. Compensation awarded for future medical expenses or attorney fees does not affect Social Security.

Social Security Disability Insurance and Workers Compensation combined cannot exceed 80 percent of pre-disability earnings. Social Security is reduced if combined benefits exceed the 80 percent cap. A lump sum award is prorated as if it were a weekly benefit. The reduction in Social Security continues until full retirement age or until the worker applies for reduced, early retirement benefits as an option to Disability Insurance benefits.

You cannot lose Medicare by accepting a lump sum Workers Compensation settlement. Talk to your Medicare intermediary about how future injury-related medical expenses will be handled.