The Interaction Between Workers Compensation, Virginia Retirement System Work Related Disability Retirement Benefits, and Social Security

 

Learn How to Qualify for VRS Work Related Disability Retirement Because of a Workplace Injury or Occupational Disease. And How to Use a Workers Comp Settlement to Increase the Amount of VRS Disability Retirement Payments You Receive.

 

As a Virginia workers comp lawyer, my goal is not only to help you maximize the amount and types of workers compensation benefits you get, but also to help you maximize your income and benefits through all available sources.

 

And those of you who are State employees for the Commonwealth of Virginia, teach at a public school, serve the community as police officers or firefighters, or work for local government for a city, county, or town may have several options if you suffer an occupational illness or injury on the job.

 

These options include: Virginia workers compensation; Social Security Disability; Work-Related Disability Retirement through the Virginia Retirement System; the Virginia Sickness and Disability Program (VSDP); and, the Line of Duty Act (LODA).

 

The purpose of this article is to discuss the interaction between workers comp, VRS disability retirement, the Line of Duty Act, and Social Security.

 

Keep reading to learn more about your legal options.

 

And if you are an injured government employee or first responder, call me if you have any questions: 804-251-1620 or 757-810-5614. I help injured employees throughout the state maximize their recovery following an on-the-job injury or the diagnosis of a disease.

 

Who is Eligible for Retirement and Disability Benefits Through the Virginia Retirement System (VRS)?

 

You are covered by the Virginia Retirement System if you are a full-time permanent, salaried employee with an employer that participates in VRS.

 

You are likely covered by VRS if:

 

  • You are a State employee.

 

  • You work for a local school board (teachers, administrative employees, clerical workers, janitors, custodians, etc).

 

  • You work for a local government, unless your municipality, county, or town has its own retirement plan. For example Norfolk has its own retirement plan.

 

You are likely not covered by VRS if:

 

  • You work part-time for a VRS-participating employer.

 

  • You are covered under the Virginia Sickness and Disability Program (VSDP).

 

  • You leave your job before retirement and request a refund of member contributions. Taking a refund cancels your eligibility for future VRS benefits.

 

What are the VRS Retirement Options?

 

There are three types of retirement benefit programs under VRS:

 

  • Regular Retirement

 

  • Work-Related Disability Retirement

 

  • Non-Work Related Disability Retirement

 

This article focuses on the relationship between VRS work-related disability retirement and Virginia workers compensation.

 

VRS Work-Related Disability Retirement

 

If you are unable to perform your job because of a physical illness or injury, mental illness, a chronic condition such as diabetes or gout, or a cognitive condition such as dementia or Alzheimer’s disease, you may be eligible to retire on disability through VRS.

 

VRS has two types of disability retirement programs: work-related disability retirement and non work-related disability retirement

 

Work-related disability retirement, also called service-connected disability retirement, provides the most in benefits among the VRS programs. Some of you may receive more in work-related disability retirement benefits than you would receive in workers comp wage loss payments, also called temporary total disability benefits.

 

Basic Requirements for VRS Work-Related Disability Retirement

 

There are two requirements you must meet to receive VRS work-related disability retirement.

 

First, you must have a compensable claim under the Workers Compensation Act.

 

Generally you can prove this through the initial Award Order that provides lifetime medical treatment for your work-related injury or occupational disease. Or, if the claim is denied and you settle it before a decision from the Workers Compensation Commission, through specific language in the settlement documents.

 

Second, you must prove that your disability is permanent and that it prevents you from returning to the job you had at the time of your work-related injury or diagnosis of occupational illness. But you can’t seek VRS service-connected disability too soon, or VRS may wait until you reach maximum medical improvement to make a decision.

 

Deadlines for Filing for VRS Work-Related Disability Retirement

 

You must act quickly if you want to pursue VRS work-related disability benefits.

 

There are two time limits for filing that may apply:

 

  • You must file for VRS disability within 90 days of the date you are terminated from employment.

 

  • If you are on leave without pay, you must file for VRS disability within 24 months after your leave without pay period begins.

 

What to Include When Completing the Application for VRS Work-Related Disability Retirement

 

When you are filing for VRS work related disability retirement, there are certain documents you must include with the application:

 

 

  • A copy of the workers compensation award letter or settlement documents.

 

  • A copy of the work accident report. I recommend including the work injury report you submitted to the employer when you were hurt initially.

 

 

  • An Attending Physician’s Report. As your attorney I can talk to your doctor and explain what evidence is necessary to get approved for VRS work-related disability retirement benefits.

 

VRS will contact your employer and confirm the date of separation of employment when you submit your application with the proper documents.

 

What Happens After Filing for VRS Work-Related Disability? The Medical Review Board.

 

When your application is complete, VRS will send it to an independent medical board to review the medical and job information you submitted. The VRS Medical Board, which includes board-certified physicians and other health care providers, will then recommend to VRS whether to approve or deny your application.

 

In deciding whether to approve your application for VRS work-related disability, the Medical Board will examine:

 

  • Is your physical injury, mental illness, or chronic health condition going to be permanent?

 

  • Are you receiving medical treatment for your injury or illness?

 

  • Are you complying with treatment recommendations?

 

  • Do you have medical evidence to support a finding that you are unable to perform the duties of your pre-injury job?

 

The Medical Board may require you to undergo an independent medical examination with a specialist. If you do not attend the examination, your application may be denied automatically.

 

What Are Your Options if VRS Denies Your Application for Work-Related Disability Retirement?

 

If your initial Work-Related Disability Retirement Application is denied, you can appeal the decision.

 

First, you must submit a letter requesting review of your application. You should submit additional medical information you have received since filing your application.

 

If your request for review is denied, VRS will refer your application to an independent fact finder. The fact finder is an attorney with experience in reviewing disability cases. The fact finder does not work for you or for VRS.

 

The independent fact finder will schedule an informal conference near you or your attorney. A court reporter will attend so that a transcript of the proceeding is available. Your employer and its attorney may also attend.

 

The independent fact finder will listen to testimony and review the medical evidence. Then the fact finder will submit a recommendation to VRS. And VRS will make a final decision.

 

If VRS denies your claim for disability retirement after this proceeding, you can appeal the decision to the appropriate circuit court. Multiple courts may have jurisdiction over your case.

 

What Benefits Do You Get if You Qualify for VRS Work-Related Disability Retirement?

 

If your application for VRS work-related disability retirement application is approved, the amount of your monthly benefit is adjusted by any Social Security benefits you may receive:

 

  • If you are eligible for Social Security Disability Insurance (SSDI) benefits, the VRS work-related guaranteed benefit is 66 2/3 of your average final compensation. You will receive this amount until the date you become eligible for SSDI benefits, at which time VRS will adjust your work-related disability benefit to 50 percent of your average final compensation.

 

  • If you are not eligible for a full Social Security retirement benefit and your SSDI claim is denied, the VRS work-related guaranteed benefit is 66 2/3 of your average final compensation.

 

  • If you are eligible for a full Social Security retirement benefit, the VRS work-related guaranteed benefit is 50 percent of your average final compensation.

 

As you can see, it is possible to receive both Social Security Disability and VRS Work Related Disability benefits at the same time.

 

Your VRS work-related disability retirement benefit may continue for the rest of your life.

 

Only if VRS determines that your condition has improved and that you can perform your pre-injury or pre-illness job will these benefits stop. If you remain unable to perform your prior occupation and do not start working with another employer that participates in VRS, you should continue receiving service-connected disability benefits.

 

Additionally, you can receive a refund of contributions that both you and your employer made to VRS before you were approved for work-related disability retirement. This is often a significant amount.

 

Taxes and VRS Work-Related Disability

 

Your monthly, guaranteed VRS work-related disability benefit is not subject to federal or state income taxes.

 

Any refund of pre-tax member contributions are subject to federal and state income taxes. But you may be able to defer taxes by rolling the VRS member contribution refund into an Individual Retirement Account (IRA) or another qualified plan.

 

Returning to Work After Getting Approved for VRS Work-Related Disability

 

You can return to work if you are approved for VRS work-related disability retirement, with some limitations.

 

For example, you cannot return to your regular job without risking forfeiture of VRS disability benefits. This is because the only way to receive VRS disability benefits is to prove that you are unable to perform your regular job.

 

Another limitation is that you cannot return to employment with a VRS participant. If you do, your VRS work-related disability benefits are either reduced or eliminated.

 

Offset of Workers Compensation Against VRS Work-Related Disability Retirement

 

Your VRS work-related disability retirement benefits are offset, or reduced, by the weekly workers comp payments you receive. The rationale is that you should not get a “double recovery” if you are hurt on the job.

 

Here is how the workers comp offset against VRS work-related disability retirement works:

 

  • If your workers comp benefit is equal to or more than your VRS work-related disability retirement benefit, you will not receive a VRS benefit until your workers comp benefits are terminated or exhausted. For some of you, this means waiting 500 weeks until you get the VRS benefit.

 

  • If your workers comp benefit is less than your VRS work-related disability retirement benefit, VRS will pay you the difference between the two benefits so that you get to your VRS benefit amount.

 

Settlement of Your Workers Compensation Claim When You Are Receiving or Have Applied for VRS Work-Related Disability Retirement

 

There are two benefits to settling your workers comp case when you have applied for or been approved for VRS work-related disability retirement.

 

First, you can negotiate with the employer so that VRS-friendly language is included in the settlement documents. This increases your chances of getting approved for VRS service-connected disability.

 

Second, you can include allocation language to reduce the direct offset of workers comp against the payment of the monthly VRS benefit.

 

Here is how it works.

 

VRS disability benefits are reduced by workers comp indemnity benefits. Indemnity benefits are wage loss payments.

 

VRS disability benefits are not reduced by other types of benefits you may receive through workers comp, such as lifetime medical treatment, permanent partial disability benefits, or vocational rehabilitation services.

 

By allocating as much of the workers comp settlement as possible toward the payment of future medical care, permanent partial disability benefits, and vocational rehabilitation, you can reduce the offset.

 

But make sure that you can justify the amounts used. This is easier if you have received a future medical cost projection or impairment rating after a functional capacity evaluation (FCE).

 

And make sure that you consider the impact that allocating a large sum of money toward future medical treatment may have if you are going to apply for Social Security Disability.

 

If you are approved for Social Security Disability you will ultimately become Medicare eligible. And as a secondary payor to workers comp, Medicare will expect you to spend the amount of money allocated to future medical treatment in the workmans comp settlement before it pays for care related to your work injury.

 

What is the Difference Between VRS Work Related Disability Retirement and Non Work Related Disability Retirement?

 

If you have read this article, then you likely understand the difference in eligibility requirements for VRS work related disability and VRS non work related disability retirement benefits.

 

But you are probably more concerned with the practical effect of getting non work related disability benefits, rather than work related disability benefits.

 

VRS non-work related disability benefits do not pay as much:

 

If you are eligible for a full Social Security benefit, the VRS minimum guaranteed benefit for non work related disability is 33 1/3 percent of your average final compensation, rather than 50 percent.

 

If you are not eligible for the full Social Security retirement benefit, or if your SSDI claim is denied, VRS will pay a minimum guaranteed benefit of 50 percent of your average final compensation, rather than 66 2/3 percent.

 

And if you do qualify for SSDI, VRS will pay a minimum guaranteed benefit equal to 50 percent of your average final compensation until the date of your eligibility for SSDI, rather than 66 2/3 percent. And just 33 1/3 percent of your average final compensation after you start receiving SSDI.

 

Because of the difference in monthly payments under VRS work related disability and VRS non work related disability, which is often several hundred or even more than one thousand dollars per month, it often makes sense to pursue a workers comp claim if you are hurt on the job and VRS eligible.

 

What is the Line of Duty Act (LODA)?

 

The Line of Duty Act provides benefits to police officers, firefighters, first responders, and other state and local public safety officers who are killed or permanently disabled from the performance of their job duties.

 

LODA Benefits include:

 

  • Death Benefits: LODA pays $100,000 to the beneficiaries of public safety officers who die from an unnatural cause. And $25,000 to the beneficiaries of public safety officers who die because of the specified work related illness, such as respiratory disease, hypertension, and heart disease.

 

  • Health insurance coverage for the permanently disabled officer, as well as the officer’s spouse, widow, and dependent children. If you qualify for benefits through the Line of Duty Act, your health insurance coverage will continue indefinitely. It will also continue for your spouse until his or her death, or until your spouse is covered by alternate health insurance.

 

Workers Compensation and the Line of Duty Act

 

If you qualify for VRS work related disability and workers compensation benefits, then you may qualify for Line of Duty Act benefits.

 

For many of my clients who are permanently disabled police officers and fire fighters, LODA is important because it allows them and their families to have health insurance coverage.

 

You can receive VRS work related disability retirement, LODA benefits, and workers comp at the same time.

 

Sample Workers Comp Settlement Language to Include When You May Qualify for Benefits Under the Line of Duty Act

 

If you suffer a compensable injury, are eligible for workers comp under the Heart and Lung bill, or qualify for VRS work-related disability retirement, then you must be careful when settling your Virginia workers compensation case.

 

You may forfeit your right to health insurance coverage if you have received a workers compensation award order, then settle your case. If, however, you settle your case on a denied and disputed basis for the Workers Compensation Commission enters an Award Order, you may be able to keep health insurance under LODA.

 

If you are a police officer or firefighter who has negotiated a settlement of your workers compensation and who may qualify for LODA benefits, I recommend including the following language in your settlement documents to protect your right to Line of Duty Act benefits:

 

The claimant and the defendants agree that the claimant’s injury/illness arose in the line of duty and entitles the claimant to benefits under the Virginia Line of Duty Act. The defendants agree that the claimant’s injury/illness resulted in disability that prevents him from performing his pre-injury work and duties as a police officer/firefighter on a permanent and total basis.

 

The employer agrees to cooperate fully with the claimant in his pursuit of VRS work-related disability retirement and LODA benefits. It will take all actions it can to assist the claimant in obtaining his work-related disability retirement through the Virginia Retirement System and LODA benefits under Virginia Code Section 9.1-402.

 

An Experienced Attorney to Help You Maximize Your Workers Compensation, VRS Work-Related Disability Retirement, Social Security Disability, and Line of Duty Act (LODA) Benefits

 

I have helped many state and local government employees negotiate workers compensation settlements that allow them to maximize the amount of VRS work related disability retirement benefits they receive.

 

In fact, I used to defend local governments and municipalities in workers comp cases. And because of this, I am familiar with the interaction between these different types of disability programs and benefits.

 

If you are a police officer, firefighter, government worker, or school employee who was hurt at work and has questions about your legal options, call me for a free consultation: 804-251-1620 or 757-810-5614. Come see why I’ve been voted one of the Best Lawyers in America for workers compensation and a Rising Star by Super Lawyers Magazine in both workers comp and disability claims.

Corey Pollard
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