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Federal Disability Retirement and SSDI or Social Security Case Law Changes

Federal Disability Retirement and SSDI or Social Security Case Law Changes

A recent decision issued by a Federal Court on January 18, 2013 represents positive news for FERS Disability Retirement annuitants who are receiving or have been receiving SSDI benefits at the same time, and have gone on to earn additional income.

Earning money can cause you to lose your social security benefits if you exceed the allowable income ceiling. When an employee no longer receives SSDI benefits, the FERS annuitant can go to OPM and request that his or her DisabilityRetirement annuity be “recalculated” based on the fact that he or she no longer receives an SSDI offset amount.

In the past FERS annuitants have encountered problems. In a recent case, OPM argued that because the individual continued to remain “entitled” to SSDI benefits, they were not required to recalculate the FERS disability retirement annuity upwards which would benefit a FERS Disability beneficiary. Unfortunately for the beneficiary this outcome made little sense as the benefciary was no longer receiving any SSDI benefits.

In this case, OPM denied a postal worker’s attempt to stop a reduction in his annuity on February 25, 2010, stating: “Your annuity was reduced because you were eligible to receive benefits from SSA. The law requires that the reduction in your annuity remain based on entitlement to Social Security benefits and not the actual receipt of such benefits. Though your employment resulted in the suspension of your SSA benefits, you still retained eligibility because you are still deemed disabled.”

The opinion issued by the U.S. Court of Appeals for the Federal Circuit in the case earlier this month, has reversed that situation and in effect exposed OPM’s error. What the outcome of the case means is that in the future when a FERS disability retirement annuitant loses SSDI benefits for engaging in work, OPM must recalculate the FERS disability retirement benefit.

“This is a major win for those former Federal and Postal workers who are, were, or will be, receiving concurrent SSDI benefits and FERS Disability Retirement benefits and who have lost or may lose the SSDI benefits and therefore will need to have their FERS Disability Retirement annuity ‘restored’ and recalculated to its original amount,” wrote Mr. Robert McGill, a seasoned Disability Retirement attorney.