Calculation of wage loss benefits when a disabled employee reaches age 65 or obtains Social Security retirement benefits.
Employees on workers’ comp for an extended period will eventually see their weekly checks reduced. This usually happens when a person reaches age 65 or starts collecting Social Security retirement benefits.
Insurance companies get a 5% old-age reduction when a person turns 65. Benefits will continue to be reduced by 5% each following year. A maximum of 50% can be taken at age 75.
Employees who collect Social Security retirement benefits can also see their workers’ comp checks drop. Michigan law allows 50% of a person’s total Social Security retirement benefit to be coordinated. This can result in a complete loss of workers’ comp benefits.
Insurance companies cannot use both the old-age reduction and the Social Security retirement benefit reduction at the same time. Individuals who are on Social Security retirement benefits at the time of the work accident, if injured on or after December 19, 2011, cannot have their workers’ comp benefits reduced beyond 50%.
Example of old-age reduction
Rick is a disabled factory worker from Sterling Heights. He has been receiving workers’ comp benefits in the amount of $500.00 per week for the last 8 years. He saw a 5% drop in weekly benefits when he turned 65 and now get $475.00. Rick will see additional 5% reductions each year until age 75 when his weekly benefit rate will be $250.00.
Rick starts receiving Social Security retirement benefits when he turns 67. His monthly amount is $1,000.00. Workers’ comp can now coordinate 50% or $500.00 each month. His workers’ comp payments would now equal $387.59.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 201-9497 for a free consultation today.
Photo courtesy of Creative Commons, by 401(K) 2013.Tags: Formula, Michigan workers comp lawyers, Social Security