The Bush Administration fiscal year 2007 budget includes a proposal to alter Social Security's workers compensation offset. The offset affects claimants who receive both disability insurance benefits and workers compensation. More information is trickling out about the proposal, which is still under development. Under current law (to greatly oversimplify) a claimant is allowed to keep up to 80% of their pre-disability income. The new plan would reduce the Social Security disability benefits of anyone receiving workers compensation by 37% for up to the first five years they are on Social Security disability benefits. The reduction would be less than 37% if the workers compensation benefits were less than 37% of Social Security disability benefits. Lump sum workers compensation benefits could not be attributed to a period of time longer than five years. There would be no effect in states with reverse workers compensation offsets, which reduce workers compensation on account of Social Security disability benefits.
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