Does Retirement Affect Workers’ Compensation?

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Injured workers in North Carolina who cannot return to work may think about retirement if they are old enough or have enough years on the job. It is possible, however, that retiring while getting workers’ compensation benefits will adversely affect your claim.

You need to consult with a workers’ compensation lawyer who knows North Carolina’s workers’ compensation laws to discuss whether you can retire and still collect workers’ compensation. If you are interested in understanding how retirement could impact your workers’ compensation benefits, contact Horton & Mendez in Wilmington, NC.

Is it Possible to Retire While on Workers’ Compensation?

You may or may not qualify for workers’ compensation benefits depending on the injury you sustained. A workers’ compensation claim should not prevent you from retiring if you’ve reached your Social Security retirement age or are eligible for your employer’s retirement plan. In some cases, your retirement may not affect your workers’ compensation claim. In other cases, it could.

Workers’ compensation benefits typically include two components:

  • Medical benefits that cover all of your medical expenses
  • Lost income benefits in the amount of 66% of your weekly earnings if you are unable to work.

You should be protected by your employer’s workers’ compensation insurance when you suffer a work-related injury or illness. You should consult with a workers’ compensation attorney as soon as possible if your company or the workers’ compensation administrator refuses to pay a medical expense.

Wage replacement payments, sometimes called indemnity benefits, are paid to individuals who are disabled for a permanent or temporary period. Once you have returned to the same wage earning capacity from a temporary disability, such as a fractured arm, disability payments end.

The wage replacement benefits may not be available if you retire and no longer receive wages. You may qualify for compensation payments for permanent disability if you lose the use of an arm or some other body part.

Under workers’ compensation law (N.C. Gen. Stat. 97-31), each body part is given an exact number of weeks of benefits if a permanent partial impairment is assigned. For example, a worker who loses a leg receives 66% of their average weekly wage for 200 weeks (nearly four years). The loss of a limb might make retirement appropriate, but it shouldn’t affect the benefits paid for a permanent impairment rating.

In some cases, it is advantageous to settle a workers’ compensation claim in a lump sum before collecting retirement benefits. Occupational injuries and illnesses can result in lump sum settlements intended to cover further medical costs, wage loss benefits, and any permanent impairment pursuant to the ratings guide.

Is it Possible to Receive a Workers’ Compensation Settlement and a Retirement Pension?

When available, workers’ compensation settlements can supplement retirement or disability pensions. Occasionally, however, insurance companies or retirement benefits plans can reduce their benefit costs by taking an offset.

In some cases, this may even be a dollar-for-dollar offset. Before accepting a workman’s comp payment, find out if there are any pension consequences. Find out what options are available from the pension administrator or a union representative.

Can I Withdraw Money If I Have a 401K or an IRA?

Federal law allows employees to withdraw money from their 401Ks or other retirement accounts. In cases where the employer contributed to a pension plan, and the funds were rolled over into a retirement account, the insurance company might coordinate the disbursements.

The result is that someone who takes money out of a retirement account might not be eligible for workman’s compensation benefits. A lawyer should be consulted before taking any action.

Do Workers’ Compensation Settlements and Social Security Benefits Offset Each Other?

Social Security retirement benefits are available to employees receiving workman’s compensation benefits. However, their benefits may be reduced. Under certain circumstances, the Social Security Administration can reduce the monthly payment by 50%. If this were to happen, all benefits would be wiped out, and any potential payouts would be reduced.

A lawyer can assist you in assessing factors to consider before pursuing a lump sum settlement, including:

  • The state of your overall finances
  • Complications that may arise from your medical situation
  • The amount available for payment
  • The offset of other entitlements under SSA or other retirement benefits

You should be aware of the ways other benefits and payments may impact your claim or income.

Your total Social Security benefit may be cut if you receive retirement or disability benefits. Your workers’ compensation payment may be subtracted from your Social Security retirement benefits. SSD and workers’ compensation benefits can’t surpass 80% of your average wages before you become disabled if you receive SSD benefits.

Are You Eligible to Receive Workers’ Compensation Benefits After Retiring?

If someone doesn’t work for the business anymore, you might expect the employer to question their workers’ compensation claim. However, so long as you satisfy the requirements for a claim, your retirement should not affect your ability to submit a valid workers’ compensation claim.

In North Carolina, you have 30 days from the injury date to notify your employer in writing and request workers’ compensation benefits. Notification should be provided ASAP. You should consult with an attorney before reporting the injury. The smallest details can often be the most important and whether or not a claim is paid. You should consult with a North Carolina workers’ compensation attorney and be sure to report the precise way the injury occurred.

In North Carolina, you have up to 2 years to file a workers’ compensation claim after the injury. However, you should not wait. The claim should always be reported as near in time to the injury as possible.

Call Us Today to Consult with a North Carolina Workers’ Compensation Lawyer

Injuries and illnesses that require you to retire or change your employment status can complicate workers’ compensation claims. It is possible to ruin your claim or decrease the benefits you receive by making mistakes in how the benefits are managed.

Horton & Mendez can assist you in pursuing a workers’ compensation claim and seeking full benefits available under the law. Contact us today to learn more.

Workers’ Compensation FAQs

Am I entitled to workers’ compensation?

You may be entitled to benefits if you were injured at work or developed a work-related illness.

Can I file a lawsuit for a work injury?

In some cases, workers’ compensation is the only remedy available to people injured on the job. To find out if an exception applies, talk to an attorney as soon as possible.

Do I need a workers’ compensation lawyer?

It’s in your best interest to talk to a workers’ compensation lawyer immediately after any work-related injury.

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