One major point of confusion that we hear a lot has to do with the difference between Social Security Disability (SSD) and Federal Disability Retirement (FDR). Both are commonly referred to as “disability”, but the benefits are not very similar.
Social Security Disability is administered by the Social Security Administration (SSA). Every person in the country that earns a paycheck pays into Social Security. If that person becomes totally and permanently disabled, they are entitled to receive a monthly check from the SSA. The key here is that it is for tax payers of all kinds and the disability has to be total.
Federal Disability Retirement is administered by the Office of Personnel Management (OPM) and is only for career federal employees. The applicant must prove that they cannot perform their assigned job duties. The employing agency has the opportunity to try to place that employee into another, equivalent position that accommodates the disability. If they are unable to find another position, the employee is granted the early retirement due to their medical condition.
The main differences are the eligibility and the degree of disability. Only career federal employees are eligible for the FDR, while any taxpayer with enough quarters paid-in are eligible for the SSD. The degree of disability is more significant for the applicant. The SSD is total and permanent disability, while the FDR is occupational. This means that the federal employee has to prove that they can’t do their specific job to qualify.
Now, to confuse matters, all federal employees under the FERS system also pays into the Social Security system with their FICA taxes. As a requirement of the application for FDR, each federal employee must complete an application for Social Security Disability. They are not required to be approved by the SSA, but simply to apply.
If the application is approved by both entities, there is a payment offset. Check out This Graphic to see how the offset works. Call Harris Federal if you have questions about your options. We are here to help!