Eligibility for Federal Disability Retirement Benefits
If you're a current or recent federal employee, you may be eligible for federal disability benefits in the event you become medically unable to perform your job. The federal disability retirement system can be hard to understand and navigate for those unfamiliar with it. Let's look at the basic requirements for federal disability retirement, and some other things to keep in mind if you're considering filing a claim.
What Are the Basic Eligibility Requirements?
The current retirement system for federal workers and postal employees is called FERS, the Federal Employees Retirement System. This system replaced the Civil Service Retirement System (CSRS) in 1987, but some federal workers who started before 1987 will still be covered by CSRS.
To be eligible for disability benefits under FERS, you must have worked as a federal civilian or postal employee for at least 18 months. (Five years of service are required if you're applying under CSRS.)
To medically qualify, you must become unable, due to a physical or mental disease or injury, to perform "useful and efficient service" in your current position, which means you must be unable to carry out an essential element of your job. Your disability must be expected to last at least twelve months from the date you file the application.
It is not necessary that your disability resulted from an on-the-job injury, work-related condition like stress, or occupational disease, as in a workers' compensation case. And unlike Social Security disability, you're not required to show that you're "totally disabled," only that you're incapable of performing the duties of your current job.
Moreover, your federal agency must state that it has tried and failed to accommodate your medical condition in your current job, and that it was unable to reassign you to another nearby position in the same agency at your grade or pay level.
Applying for Federal Disability Retirement
You must apply for disability retirement while still employed by the federal government or within one year of separation from federal employment. Note that "separation" from employment is not necessarily the date you became disabled or even the date you stopped working.
You apply by filing forms with your federal agency. But if you've been separated from federal service for more than 31 days, you should submit your disability application directly to the Office of Personnel Management (OPM) rather than to your federal agency.
Once OPM receives your application, it will make an initial determination based on your medical records, your doctors' opinions, and your application itself.
Appealing a FERS Denials
If you are denied FERS benefits, you have 30 days to ask for a reconsideration, during which time you should add new or updated material to your record that could be helpful to your case.
If you are denied again, after asking for a reconsideration, the next appellate level is to a quasi-judicial agency known as the Merit Systems Protection Board (MSPB), where an Administrative Law Judge or panel of judges will decide your case.
Only after you've exhausted all your administrative remedies can your case proceed to federal court. Throughout the process, pay close attention to filing deadlines and other instructions for submitting your appeal. A single missed deadline can torpedo an otherwise meritorious claim.
Other Requirements for FERS Benefits
Like many long-term disability policies, the federal disability retirement program requires you to apply for Social Security disability benefits (SSDI). If you are approved for Social Security, the amount of your SSDI benefits will be subtracted from your FERS benefits. For the first year you get SSDI, there is a 100% offset and each following year, an offset of 60% (meaning 60% of the amount of your SSDI is subtracted from your FERS benefit). But because it's substantially easier to be approved for federal disability retirement than Social Security disability, it is common for a person to qualify for the former but be denied the latter.
Can you work while receiving disability retirement? Yes, as long as you're working in the private sector and not earning more than 80% of your federal salary. This amount includes only earned income, not income from investments or rental properties. The same is not true for Social Security disability.
After You're Approved for FERS Benefits
How much you will receive in disability benefits depends on your age and length of federal employment. The formula for calculation of benefits is complicated, but expect to receive about 60% of your "high-3 average" salary the first year you get benefits and 40% thereafter. (High-3 average means you choose the consecutive three-year period where you made the most money (not including overtime) and you take the average yearly salary.)
Keep in mind that this amount can be impacted by the Social Security disability offset mentioned above.
For those over 62 at retirement and those eligible for immediate voluntary retirement, you'll receive about 1% of your high-3 salary for each year of service. For instance, if you worked for the federal government for 25 years, you'll receive 25% of your high-3 salary. Check with an attorney or OPM for questions about your particular situation.
Once you've been approved for federal disability retirement, you may be periodically required to provide the Office of Personnel Management with current medical evidence to show that you're still eligible for benefits. Your disability retirement benefits can be terminated if you don't continue to obtain regular medical treatment for your condition.