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Leave Without Pay and Back Pay: What to Know About This Dynamic

Leave Without Pay and Back Pay: What to Know About This Dynamic

Financial stress most often presses a federal employee who is disabled for his/her position description to scramble for some sort of income during the application process for OPM Federal Employee Disability Retirement. It is certainly difficult to survive without a steady source of income, but refusing the opportunity may just be your best bet.

Once you are approved for OPM Disability Retirement, in addition to annuity payments, you will be awarded back pay. The effective date from which back pay is calculated is the day following the last time you were paid, either by your agency or the OWCP.

What this means practically: If you have used up all your leave and have been on LWOP for 6 months, finances are probably becoming an issue and you will likely put forth your best effort to show up at work for a day here and there or perhaps even a week just to get a bit of compensation. Contrary to the instinctive feeling, you may be losing money if you are ultimately approved for OPM Disability Retirement, since the back pay will not cover those 6 months now as the last day of pay has been changed to a more recent date.

A similar situation is if you are unable to work full time, but choose instead to work 1 or 2 days a week while waiting for a determination from OPM. This arrangement provides you with 20% or 40%, respectively, of your salary (for a 5 day workweek), which is certainly a measure of financial relief. However, if you were to be granted OPM Disability Retirement, you would be awarded 60% of your salary (during the first year) for that same time period were you not to have worked at all!  Not too shabby!

Make sure to have a qualified law firm such as Pines Federal, who will help you avoid these pitfalls throughout the application process of OPM Disability Retirement, and will be there for you to ensure that you have a strong application with all the necessary details included. Contact Pines Federal at 800-801-0598 or office@pinesfederal.com