Introduction
Federal Disability Retirement is a valuable benefit designed to support federal employees under the Federal Employee Retirement System (FERS) who can no longer perform their job duties due to a disabling condition. This article provides a detailed overview of Federal Disability Retirement, addressing common questions and concerns.
What is Federal Disability Retirement?
Federal Disability Retirement is a benefit specifically for FERS employees who have become disabled and are unable to maintain their current employment due to medical reasons. To qualify, you generally need at least 18 months of credible service, and your eligibility is determined by the Office of Personnel Management (OPM).
Benefits of Federal Disability Retirement
Federal Disability Retirement offers several key benefits:
- Monthly Annuity: You receive a monthly payment based on your high-three average salary.
- Service Credit: Your years of service continue to accumulate until age 62, contributing to a larger pension upon reaching retirement age.
- Private Sector Employment: You can work in the private sector while receiving disability benefits, subject to an income limitation.
- Insurance Continuation: You can often maintain your health and life insurance coverage.
Calculating Your Annuity
Your Federal Disability Retirement annuity is calculated based on your “high-three average” salary. This is the average of your highest 36 consecutive months of basic pay. In the first year of receiving disability retirement, you will receive 60% of your high-three average. After the first year, and until you reach age 62, this amount reduces to 40% of your high-three average.
Working While on Federal Disability Retirement
A significant advantage of Federal Disability Retirement is the ability to work in the private sector while receiving benefits. It’s important to note that you cannot return to federal employment as it can affect your annuity. However, you are allowed to earn up to 80% of your former federal position’s current salary in the private sector without jeopardizing your benefits. Any income earned above this limit may reduce your annuity payment.
Frequently Asked Questions
Here are answers to some of the most common questions about Federal Disability Retirement:
1. What is the “high-three average”?
This is the average of your highest-paying 36 consecutive months of basic pay, which forms the basis for your annuity calculation. You can find this information on your SF-50 (Notification of Personnel Action) forms.
2. Do I need to be approved for Social Security Disability to qualify?
No, you do not need to be approved for Social Security Disability Insurance (SSDI) to qualify for Federal Disability Retirement. However, you are required to apply for SSDI as part of the OPM’s evaluation process.
3. Can I receive workers’ compensation while on Federal Disability Retirement?
You cannot receive both OWCP (Office of Workers’ Compensation Programs) wage loss payments and Federal Disability Retirement benefits simultaneously. However, you can apply for both and place your retirement benefits on hold until your OWCP payments end.
4. What happens to my Thrift Savings Plan (TSP)?
While receiving Federal Disability Retirement, you cannot contribute to your TSP. However, you have three options:
- Leave your funds in the TSP to continue earning interest.
- Roll over your TSP into an eligible retirement account.
- Withdraw your TSP funds (subject to potential taxes and penalties based on your age).
It’s advisable to consult a financial advisor to determine the best course of action for your individual circumstances.
5. Can my benefit be taken away?
The OPM conducts periodic income and medical reviews to ensure you still meet the eligibility criteria for Federal Disability Retirement. To maintain your annuity, stay within the earned income limit and continue receiving regular medical treatment for your disabling condition.
Reasonable Accommodation
Before applying for Federal Disability Retirement, it’s essential to request reasonable accommodations from your agency to try to remain employed. If you’ve exhausted all reasonable accommodation efforts without success, Federal Disability Retirement may be your next step.
Seeking Legal Guidance
Navigating the complexities of Federal Disability Retirement can be challenging. If you’re considering applying or have been denied benefits, consulting with an experienced federal employment law firm specializing in disability retirement is highly recommended. They can provide expert advice, guide you through the process, and advocate on your behalf.
Conclusion
Federal Disability Retirement is a vital safety net for eligible federal employees who can no longer work due to a disabling condition. Understanding your rights, benefits, and options is crucial to making informed decisions about your future.
Additional Resources
U.S. Office of Personnel Management (OPM)
Social Security Administration (SSA)
Office of Workers’ Compensation Programs (OWCP)
Thrift Savings Plan (TSP)