The SSDI Requirement
When you apply for FERS disability retirement, you are also required to apply for Social Security Disability Insurance (SSDI) benefits. This is not optional — it's a condition of receiving FERS disability retirement.
How the Offset Works
For annuitants under 62 receiving the special disability computation rather than an applicable earned-annuity computation, the general formula is:
- First 12 months: Your FERS benefit (60% of high-3) is reduced by 100% of your SSDI benefit
- After 12 months: Your FERS benefit (40% of high-3) is reduced by 60% of your SSDI benefit
What If SSDI Is Denied?
If your SSDI application is denied, you must provide OPM with proof that you applied and were denied. An SSDI denial does not itself bar FERS disability approval, and there is no SSDI offset for months without SSDI entitlement. Other applicable reductions and computation rules still apply. Whether to appeal an SSA denial depends on that decision and its deadlines; approval on appeal is not a FERS requirement.
The Guaranteed Minimum
OPM compares the special disability computation with the applicable earned annuity under the governing rules. The earned-annuity minimum is based on your high-3 and actual creditable service, rather than a universal minimum dollar payment. Survivor elections and other applicable deductions affect take-home amounts.
Report SSA Awards and Changes
Notify OPM promptly of SSDI entitlement, award dates, amounts, and later changes. A retroactive SSA award can create an OPM overpayment for overlapping months. Set aside the potentially affected funds until OPM confirms the adjustment.
SSA generally does not offset SSDI for a disability benefit based entirely on Social Security-covered FERS employment. Mixed CSRS/noncovered service can require different treatment. SSDI also has separate work rules, and its conversion to Social Security retirement occurs at full retirement age, not automatically at 62.
Planning Ahead
Understanding these offset rules before you file helps you plan financially. Many federal employees are surprised by how much their FERS disability payment is reduced by SSDI. Working with a financial advisor who understands federal benefits can help you prepare for the actual income you'll receive.
Keep reading
- What Happens to FEHB, FEGLI, and TSP After Disability Retirement
- What Counts as “Earned Income” Under the 80% Rule
- Can You Work After Disability Retirement? The 80% Limit
Related: Approved for FERS Disability Retirement. When Does the First Payment Arrive? — interim pay and the SSDI overpayment risk.