In 1987, Federal Employees Retirement System is (FERS) became a major part of the benefits that federal employees receive. FERS benefits program is made up of three components; the FERS basic benefit, Thrift Savings Plan benefit, and the Social Security benefit.
When a federal employee becomes disabled and finds themselves in need of disability benefits, they often wonder about the relationship between FERS benefits and Social Security Disability benefits. The following information help clarify the role Social Security Disability benefits play in the FERS program.
First, before finding out what your disability benefits (if any) will be from FERS, you must be certain you are eligible to obtain FERS benefits. To qualify for FERS benefits you would have had to complete a federal civilian service for a period of 18 months, become disabled during your employment, and meet the requirements for SSDI disability, or else you would not qualify for the benefits under this program.
SSDI and FERS
It is vital to know that once you start to receive (Social Security Disability benefits), it can affect your yearly FERS disability benefits. In the first 1 year of your disability, 60 percent of your three-year-average high-salary (High-3) amount would be paid to you. Once the Social Security Administration (SSA) starts giving you disability benefits, your FERS disability payment could be reduced by the SSDI amount received by you. For instance, if $4,000 per month was your High-3, $2,400 would be your FERS payment every month. If your SSDI payment is $1,100 every month, you would receive $1,300 every month from the FERS program because of the amount you are collecting from the SSA. You would still receive a total of $2,400 every month. You would get a portion of $2,400 from SSDI and a portion from FERS.
A year after your disability, you will get 40 percent of your High 3 minus 60 percent of your SSDI benefits. For example, if $4,000 was your High-3, every month you would start receiving $1,600 every month, yearly, for your FERS benefits. Every month you would still be getting $1,100 from SSDI. However, 60 percent of that amount would be removed from your FERS payment. As a result, your FERS payment every month would be $1,600 minus $660, the actual FERS payment would be $940 monthly, at the end of every month you would get a total of $1,940 per month ($1,000 from SSDI and $940 from FERS).
Many people feel they can only qualify for one of these plans (FERS disability or Social Security Disability). That is not necessarily true because you can qualify for both if you meet the eligibility requirements. You can get both SSDI and FERS benefits. However, the amount of SSDI received from the SSA can potentially have an impact on how much your FERS annuity is.