The 80% rule
SSA's operations manual says the Social Security Act requires SSA to reduce disability benefits when a worker is also eligible for workers' compensation, so that the combined amount does not exceed 80% of the worker's average current earnings (ACE).
- Average current earnings is the highest of three figures SSA computes from your earnings record: your best single year, your best five consecutive years, or the average monthly wage used for your benefit.
- The applicable limit is the higher of 80% of ACE or your total family Social Security benefit.
Example
Suppose your average current earnings are $5,000 a month, so 80% is $4,000. You receive $2,400 a month in workers' comp and would otherwise get $2,200 in SSDI.
- Combined, that would be $4,600, which is over the $4,000 limit.
- SSA subtracts the workers' comp from the limit: $4,000 − $2,400 = $1,600.
- Your SSDI is reduced to $1,600 a month, and the total you receive is $4,000.
The example assumes 80% of ACE is higher than your total family benefit. If your family benefit is higher, SSA uses that as the limit instead.
Lump sum settlements
SSA treats a lump sum settlement, compromise and release or other approved final agreement as a final workers' comp payment. It prorates the lump sum into a monthly rate and deducts excludable expenses before applying the offset. The rate used for proration can make a large difference, so have the settlement reviewed with SSDI in mind before you sign.
When the offset ends
The reduction stops when you reach full retirement age or when workers' compensation ends. It does not apply at all in states whose law reduces workers' compensation for SSDI recipients (a "reverse offset") that SSA recognizes.
On taxes: the part of workers' comp that causes an SSDI reduction is treated as a Social Security benefit and may be taxable. Read the tax rules.
Frequently asked questions
Can I get workers comp and Social Security disability at the same time?
Yes, but Social Security may reduce your disability benefit so that the two together do not exceed a limit, generally 80% of your average current earnings before you became disabled.
When does the workers comp offset end?
According to SSA, the reduction stops when you reach full retirement age, and it also ends when workers' compensation stops. Some states reduce workers' comp instead (a reverse offset), in which case Social Security does not reduce your disability benefit.
Does a lump sum settlement affect SSDI?
It can. SSA treats a lump sum settlement as a final payment, prorates it into a monthly amount and deducts excludable expenses before applying the offset. How the settlement is worded can change the monthly figure SSA uses.
Sources
Checked November 3, 2026.