Michigan workers’ comp lawyer explains available disability benefits and how to maximize payments.
We frequently see employers take advantage of people who do not understand their legal rights. Individuals who are hurt on-the-job can have overlapping disability benefits and it is important to understand how to coordinate these payments. A question we are frequently asked by clients is what pays more workers’ comp or disability in Michigan? The answer is going to depend upon several factors including the type of disability and how long an employee is expected to remain off work.
In Michigan, workers comp will pay disabled employees 80% of their after-tax average weekly wage and it does not matter what type of disability is preventing them from working. Payments continue for a person’s lifetime provided they remain in the workforce. There should be no income tax on workers’ comp benefits. Group disability insurance often pays about 60% of a person’s salary and is usually taxable.
Our experience shows that some employers push employees to make claims under group disability insurance instead of workers’ comp. This is to save money on premiums. Entitlement is harder to prove after two years because the definition of disability frequently changes from one’s own occupation to any occupation. Employees who are suffering from mental health issues might find their disability benefits prematurely ended because they are almost always limited for this type of condition.
What pays more in Michigan, workers’ comp or disability?
In Michigan, workers’ comp pays 80% of an employee’s after-tax average weekly wage while group disability plans usually pay around 60% of gross pay and these benefits are usually taxable where money paid under workers’ comp in Michigan is income tax free. It is important to note that the after tax average weekly wage calculation includes overtime, discontinued fringe benefits, and even second jobs.
Group disability insurance plans usually pay a disabled employee up to 60% of their pre-disability income. These policies are sometimes called short-term disability or long-term disability. Money paid is often taxable. The length of time payments continue varies and may be as short as two years. The standard of disability might also shift from being unable to do a person’s own occupation to being unable to do any job.
What pays more in Michigan workers’ comp or the Social Security Disability Insurance Program?
Some disabled employees also apply for Social Security disability benefits (SSDI). In Michigan, individuals can collect both workers’ comp and Social Security disability benefits at the same time, however, there is usually an offset that reduces what SSDI pays. There are also important tax considerations when a SSDI offset is applied. It is possible to minimize this offset if a person settles their workers’ comp claim for a lump sum cash payment.
We recommend speaking with an experienced workers’ comp lawyer whenever you have overlapping disability benefits. It is important to maximize what is paid and to avoid unnecessary tax consequences.
Injured while on-the-job in Michigan? Contact our lawyers now
If you were injured while on the job in Michigan and are wondering what pays more workers’ comp or disability insurance, call us now, or fill out our contact form for a free consultation. There is absolutely no cost or obligation. Our attorneys are here for you.
Our attorneys have been exclusively helping injured workers in Michigan for more than 35 years. Our attorneys can help you better understand Michigan work injury laws and what happens after someone has been hurt on the job. To see what our own clients have to say about the caring, compassion, and communication they received from us, you can read in their own words about their experience here on our testimonials page from clients we have helped.
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.