One of the least understood choices faced by employees who are disabled or injured in the line of duty is whether to accept disability retirement, which is administered by the Office of Personnel Management or accept workers’ compensation, which is administered by the Office of Workers’ Compensation Programs (OWCP) in the Department of Labor.
If you are approved for workers’ compensation and an annuity, you can’t receive both. You have to elect one or the other. Note: There is no bar to an employee who elects to receive a disability annuity also receiving a scheduled award from FECA.
By and large, those who are eligible for both benefits choose workers’ compensation. That’s because the dollar amounts provided under FECA are more generous than those in a federal disability annuity.
If you have been approved for both an annuity and workers’ compensation and elect workers’ compensation, the disability annuity is suspended. Therefore, if your workers’ compensation benefits cease, your disability annuity can be reactivated as long as you haven’t recovered from the disabling condition or been restored to earning capacity. But you don’t have to wait for workers’ compensation benefits to stop. You can make the switch to an annuity whenever you want to. Just be aware that if you go back to work, you’ll be subject to the rules governing reemployed annuitants. In most cases that means having your salary offset by the amount of your annuity.
If OPM approves your case before OWCP does, it will begin making annuity payments to you. Then, if OWCP subsequently awards you benefits and you elect to receive them instead, the annuity already paid out to you must be reimbursed to OPM. In most cases, OWCP handles this by withholding the required amount from your initial payment. That payment is retroactive to the date when you went off the employment rolls.
It’s important to understand that the time you spend on workers’ comp will not be counted in computing a new disability annuity or a regular annuity based on age and service. Instead, your annuity will be computed based on your service and “high-3” average salary as of the date you went on the annuity roll. However, it will be increased by any applicable cost-of-living-adjustments (COLAs) that were made during that period.
Not all job-related injury or disability cases require that you separate from the service. Those of shorter duration may be handled through the receipt of workers’ comp while you are on leave without pay (LWOP). In that case, all the time spent on LWOP is considered creditable at retirement for determining your length of service and your “high-3” average salary. Unlike regular LWOP, the time you spend on workers’ comp is not subject to the six month per year limitation on creditable service.
