- Learn how social security disability benefits differ from federal disability retirement.
- Disability retirement is considered “occupational” benefits
- Income from a FERS or CSRS disability pension is offset by social security disability benefits
Any federal employee who becomes disabled after at least 18 months on the job is eligible for a FERS disability retirement. (CSRS has a disability benefit too, but any remaining CSRS employees out will already be eligible for a non-disability retirement.) There is often some confusion to arise when it comes to the differences between social security disability benefits and a disability retirement from the federal government. While the benefits provided by social security are classified as a “total” disability benefit, the FERS disability retirement is considered “occupational.” What this means is that you can work in the private sector and still collect FERS income from a disability retirement. This is not the case with social security disability benefits as they were designed to provide income to those who are not able to work for themselves. With a federal disability retirement, you can find another job. If the new salary is more than 80% than the former federal job’s pay, then there are some restrictions and other rules to watch out for.
Learn more about FERS retirement benefits at our no cost webinar for feds-
An additional feature about a federal disability retirement under FERS is that they the benefits can function in tandem, or separate from, the disability payments from social security, which are available to numerous American workers who suffer from a debilitating condition. Social security disability benefits have stricter rules, and the application takes longer to process than disability retirement income from either FERS. If someone were to qualify for social security disability and a disability retirement, then the FERS amount would be offset by 100% of the amount from social security in the first year that both are collected, then 60% in the second year, and 40% for every year after that.
When applying for a disability retirement under FERS, the disabled fed must also apply for social security disability benefits. Even if the Social Security Administration denies the request, the approval or disapproval notice must be submitted along with the application for a FERS disability retirement.
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**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.
