Many SSDI recipients receive benefits from multiple sources, but these benefits can interact in complex ways that affect payment amounts. Understanding these interactions in 2025 helps beneficiaries maximize their total income while avoiding unexpected reductions.
Workers’ Compensation Offset
When combined with workers’ compensation or certain public disability benefits, SSDI payments may be reduced if the total exceeds 80% of your average current earnings (ACE) before disability. This “offset” ensures you don’t receive more in combined benefits than you earned while working. Important considerations:
- The offset applies until workers’ compensation ends or you reach full retirement age
- Some states apply the offset to workers’ compensation instead of SSDI
- Lump-sum settlements are prorated to calculate the offset
- Medical expenses and legal fees may reduce the amount subject to offset
Private Disability Insurance
Unlike public benefits, private long-term disability (LTD) insurance usually doesn’t reduce SSDI payments. However, most private policies include offsetting provisions that reduce their payments when you receive SSDI. Typically:
- You’re required to apply for SSDI when receiving private disability
- Your private benefit decreases by the amount of your SSDI benefit
- Some policies require you to apply for dependent benefits as well
- Many private insurers assist with SSDI applications to reduce their costs
VA Disability Benefits
Veterans Affairs disability compensation doesn’t affect SSDI benefits and vice versa. You can receive both simultaneously without any reduction, as these programs have different eligibility criteria and funding sources.
Unemployment Benefits
Receiving unemployment benefits while on SSDI creates a potential conflict since unemployment requires certifying you’re able to work, while SSDI requires being unable to work. While not strictly prohibited, this combination may trigger a review of your SSDI eligibility.
Retirement Benefits
When you reach full retirement age (67 for those born in 1960 or later), SSDI automatically converts to Social Security retirement benefits. The payment amount remains the same, but program rules change. If you’re receiving reduced early retirement benefits when approved for SSDI, your benefit will increase to the full disability rate.
SSI Benefits
You can receive both SSDI and SSI if your SSDI payment is below the federal benefit rate ($967 in 2025) and you meet SSI’s strict asset limitations. SSI will be reduced by your SSDI amount minus certain exclusions.
Understanding these interactions can help you develop strategies to maximize your total benefits while remaining compliant with program rules.
