Retirement & Financial Planning Report

It’s unfortunate but there are some federal employees who end up with a disabling mental or physical condition that makes it impossible for them to continue in their current job. If their condition is verified and is expected to last at least one year, these employees are eligible to apply for disability retirement. If the disability is determined to be permanent, the benefit is never reviewed once granted. If it isn’t, periodic medical evaluations will be required until age 60.

Under both CSRS and FERS disability benefits are payable if you have become so disabled that you are prevented from performing useful and efficient service in your current position. The length of service requirement for being eligible to apply for disability retirement is different for CSRS and FERS employees. A FERS employee only needs to have competed 18 months of creditable civilian service while a CSRS employee must have completed at least five years. Considering that CSRS was closed to new hires years ago and that anyone returning to the workforce as a CSRS Offset employee will already have five years under his belt, the latter rule is now meaningless.

If you want to apply for a disability retirement, you must send the paperwork to the OPM. Your agency can help you do this. At the same time, your agency must certify that it is unable to accommodate you in your present position or any vacant position in your commuting area that is at the same grade and pay.

CSRS Offset or FERS employees also will have to apply to the SSA for disability retirement. SSA has different and much higher standard for determining if you are disabled. Under their rules, you must be so severely disabled that you cannot perform any substantially gainful employment.

Note also that disability retirement is a separate benefit from compensation under the Federal Employees Compensation Act, which is run by the Labor Department and which covers only illnesses or injuries that are work-related. Generally speaking, if you qualify for both FECA benefits and federal disability retirement, you have to choose one or the other.

If you are judged to be disabled, how much of a benefit will you receive? If you are a CSRS employee, you will receive either 40 percent of your “high-3” years of average salary or an amount that results from increasing your actual service from the date the disability retirement is approved to age 60. In effect, the 40 percent calculation is the guaranteed minimum you will get. If your service credit calculation entitles you to more, you will get that amount.

If you are a FERS employee who is under age 62, you will receive 60 percent of your “high-3” average salary – minus 100 percent of any Social Security disability benefit – for the first 12 months. After that, the figure is reduced to 40 percent minus 60 percent of the Social Security benefit.

Whether you are CSRS or FERS employee, if your earned benefit based on years of service is greater than these figures, you will get the higher amount. At age 62, your whole benefit will be recalculated as you had worked from the onset of the disability to age 62.