A Congressional Research Service has revived the long-time—but largely dormant—issue of whether federal employees who are on long-term disability compensation should be switched instead to disability retirement.
Currently, someone who qualifies under both programs—a main difference being that eligibility under the Federal Employees Compensation Act requires that the disabling condition was work-related—gets a choice of one or the other. In many cases they choose the FECA benefit because it is larger than what they would receive under the disability retirement formula.
Further, there is no limit to how long FECA payments can continue, leading to situations in which benefits continue long past the age at which it is clear that the person will never return to work—and to past proposals that FECA beneficiaries be moved to disability retirement at some point.
A new CRS report describing the FECA program and issues for Congress to consider noted a 2020 inspector general report finding that in the Postal Service alone, nearly 15,000 FECA beneficiaries are receiving payments for conditions that are expected to be permanent, with more than 2,600 of them age 70 or above—including one 105 years old.
Said the report: “If FECA disability benefits are intended solely to replace income lost by a worker because of an injury or illness, then one can reasonably argue that these benefits should stop at retirement age, when the worker would likely voluntarily stop working on his or her own, and thus no longer have wages to be replaced. It could be argued that the provision of FECA benefits for wage loss is analogous to the SSDI program.”
“However, if FECA disability benefits are intended to provide some relief to the worker beyond wage replacement, such as providing additional money that might have been paid by an at-fault employer through the tort system or guaranteeing a certain minimum standard of living for a disabled worker, then stopping benefits at any age while the disability continues would violate this intent and deprive the beneficiary of deserved benefits,” it says.
It notes that the Social Security Disability Insurance program stops paying disability benefits when a disabled beneficiary reaches retirement age and automatically converts the person to regular Social Security retirement benefits. Also, 15 states limit their FECA-style programs for their employees, including some with a cutoff age.
In contrast, it said, some other federally run workers’ compensation benefits programs such as the Longshore and Harbor Workers’ Compensation Act pay benefits for the life of the beneficiary if the condition continues.
ask.FEDweek.com: Disability Retirement Calculation
ask.FEDweek.com: Federal Disability Annuity
ask.FEDweek.com: Social Security Disability Benefits