A healthy dose of disability coverage

FCW.com's Ask Milt column explains some of the pitfalls to be aware of when applying for disability benefits under FERS

A Reader Writes:

I was wondering if you could better explain the disability coverage available to employees covered under the Federal Employees Retirement System.

It seems like as a new employee, it would be smart to purchase a supplemental private plan—at least for the first 18 months of service. However, many disability companies I have contacted say they do not cover federal employees.

Milt Replies

Because you're not eligible for disability benefits under FERS until you have 18 months in FERS under your belt, it definitely pays to buy disability insurance during that initial period. You shouldn't have a problem getting coverage if your health is OK.

If you ever have to apply for a FERS disability retirement, one of the pitfalls to watch for is the interaction with Social Security benefits. The FERS disability application must show that you have applied to the Social Security Administration for a disability benefit. You must indicate the case number that has been assigned and any documentation you have supplied. This doesn't mean that you have to wait for adjudication of your case; only that you have completed the initial application process.

You must also keep the Office of Personnel Management informed of any changes in your Social Security disability status that might affect your annuity payment. You would not want to receive an overpayment from OPM that you might have to pay back.

Another problem to be aware of involves the last day of pay (LDOP) that serves as the starting date of a disability annuity. Donated leave can cause confusion regarding your actual LDOP, so always review your agency's certified LDOP for accuracy.

If you are under age 62 when you receive a disability retirement, be sure to ask about the impact of making deposits for previous civilian or military service. When you reach age 62, your annuity will be recomputed using your creditable years of service. If you have military or temporary service that you have not made a deposit for at the time of your disability retirement, this service will not be considered in your recomputed annuity computation at 62.

Retirees also should be aware that they cannot receive benefits from workers' compensation and the retirement plan at the same time. An employee can apply for both and then choose the higher benefit, but should keep OPM aware of the status of a workers' comp claim or payment.

If you are under age 62, federal retirement law requires your disability benefits under FERS to be reduced by 100 percent of your Social Security benefits for any month in which you are entitled to Social Security during the first 12 months of eligibility. After the first year, your disability annuity is equal to 40 percent of your "high three" average salary minus 60 percent of your Social Security benefits. Therefore, it is your responsibility to document that you have applied for Social Security disability benefits

A Reader Writes:

Why is it so difficult to tell whether you even qualify to apply for government jobs?

Milt Replies:

Everything about working for the government is difficult. Why should this be an exception?

Zall is a retired federal employee who since 1987 has written the Bureaucratus column for Federal Computer Week. He can be reached at milt.zall@verizon.net.

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