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Sep 19

Effective ways to use workers’ compensation

In my Aug. 15 and Sept. 5 columns, I described eligibility for and calculation of disability retirement benefits. In this column, I’ll discuss workers’ compensation, which may be a better option if you are disabled or injured in the line of duty.

To be considered disabled, you and your agency must provide the Office of Personnel Management with proof that you are unable to perform on the job because of a disabling condition. It doesn’t matter if the disease or injury that disabled you was incurred on or off the job. Further, your agency must certify that you aren’t qualified for reassignment to any other vacant position within your agency and in your commuting area. If OPM agrees that you are disabled for any “useful and efficient service,” it will approve your application for disability retirement. The annuity you receive will partially replace your lost salary.
On the other hand, if you have a permanent, total or partial disability because of disease or injury that occurred on the job while you were performing your assigned duties, the Labor Department’s Office of Workers’ Compensation Programs (OWCP) will pay you lump-sum benefits in the form of scheduled and nonscheduled awards.

Nonscheduled awards are compensation for the loss of wage-earning capacity. They are paid for the period during which you are unable to resume regular work because of an injury or a disease-related disability. The amount of compensation is based on the difference between your capacity to earn wages and the wages of the job you held when injured.

Scheduled awards are paid for a permanent impairment incurred on the job, such as the loss of an eye. The amount you can receive is spelled out in law. With one exception, you can receive a scheduled award even if you are still employed or have retired. The exception is that you can’t receive both a scheduled and an unscheduled award for the same injury.

If you apply for workers’ comp, you should also apply for disability retirement benefits. That way, you can preserve your rights and those of your survivors if you should die. If you are a Federal Employees Retirement System employee who applies for disability retirement, you must file for Social Security disability benefits. If you don’t, OPM won’t process your application.

If you are approved for both workers’ comp and the disability benefits, you’ll have to decide which one to take. That’s because you can’t get both benefits at the same time. Since workers’ comp benefits are usually greater, employees usually choose them.

If you have applied for both benefits, as a rule OPM will make its decision before OWCP does. If it approves your application for disability retirement, it will start making annuity payments. If OWCP later awards workers’ comp benefits and you elect to accept them, the annuity payments you’ve already received must be repaid to OPM. However, in most cases, OWCP will handle this by withholding the required amount from your workers’ comp payment or payments, which will be retroactive to the day when you separated from your agency.

While on workers’ comp, your disability annuity payments will be suspended. If workers’ comp benefits end for any reason, including personal choice, OPM will reinstate your annuity as long as you haven’t recovered from your disability or been restored to earning capacity.

If your disability annuity is reactivated, the time you spent on workers’ comp won’t be included when OPM computes your new disability annuity or regular annuity. Instead, your annuity will be based on your actual service and high-three salary — the average of your highest-three consecutive annual salaries — on the day you retired on disability, increased by any cost-of-living-adjustments that have occurred since then.

Clearly, not all job-related injuries or disabilities cases require that you separate from the service. If they are of short duration, you may be able to receive of workers’ comp while you are on leave without pay (LWOP).

In that case, all the time you spend on LWOP is creditable for future retirement computation and high-three purposes. Unlike regular LWOP, the time spent on workers’ comp isn’t subject to the six-month per year limitation on creditable service.

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