If you work for the federal government and you’re disabled due to a work-related injury, you can apply for early retirement through the Office of Personnel Management's Disability Retirement program. These benefits are separate from workers’ compensation benefits.
This article explains what early retirement is and how it can help you.
What’s the Difference Between Workers’ Comp and Disability Retirement Benefits?
Workers’ compensation benefits for federal employees are administered by the Office of Workers’ Compensation Programs (OWCP). Employees are eligible for benefits only if they have suffered a work-related injury or illness. Workers’ comp pays for medical bills and time off from work, among other things. (For more information, see Worker’s Compensation for Federal Government Employees.)
The Office of Personnel Management (OPM), on the other hand, is the federal agency that administers disability retirement benefits for employees of the federal government. Employees who are disabled and no longer able to work may apply for early retirement, regardless of whether the disability is work-related.
Although the two systems are separate, an injured worker may be eligible for both. This happens when an employee is injured at work, develops a disability that is not expected to improve, and can no longer return to his or her old job.
Who Is Eligible for Federal Disability Retirement?
The federal government has two different retirement systems for federal employees: the Federal Employees Retirement System (FERS) and the Civil Service Retirement System (CSRS). The FERS is the current retirement system that federal employees are enrolled in, while the CSRS is the previous retirement system for employees who were enrolled before 1978 and chose not to switch over to the FERS.
To be eligible for disability retirement, you must meet all of the following requirements:
- You must have worked for a federal employer for at least 18 months (under FERS) or 5 years (under CSRS).
- You must be disabled and no longer able to perform one or more of the essential functions of your current position.
- Your disability must be expected to last at least one year.
- Your employer must not be able to reassign you to a vacant position in the same federal agency, with the same pay or grade level, and in the same commuting area.
- You must apply for Social Security Disability Benefits (for FERS only).
To apply for disability retirement under FERS or CSRS, you must apply with the OPM (or your federal employer) within one year of your separation from federal service. The clock begins to run when you are actually separated from your job. Time off under workers’ compensation laws or being placed on leave without pay does not count.
Do I Have to Take a Different Job If Offered By My Employer?
If you’re unable to perform one or more of the essential functions of your job, you will be eligible for federal disability retirement benefits, regardless of whether you can perform other types of work. In fact, you may be able to perform a number of other jobs within your federal agency.
However, you’re not required to accept just any position that your employer offers. Your employer must offer you a position with the same pay, grade level, and in the same commuting area as your previous position. If your employer is unable to offer such a position, you are entitled to disability retirement benefits.
In contrast, if you are partially disabled and receiving workers’ comp benefits, you must accept work that the OWCP deems suitable. You may be required to accept a job that pays less, has different hours, or is even a different type of work than you normally perform. If you reject a suitable job offer, the OWCP can stop your workers’ comp benefits.
Can I Work in the Private Sector?
Disability retirement benefits allow workers to separate from their positions with the federal government and move on in life, even starting a new career in the private sector. As long as your new job doesn’t pay more than 80% of what your former job currently pays, you can continue to collect disability retirement benefits while holding down a new job.
By contrast, the federal workers’ compensation system restricts your ability to go out and find other work while you’re receiving workers’ comp benefits. Workers receiving temporary disability benefits through workers' comp cannot continue to receive the same amount in benefits while receiving income from a new job. Instead, your temporary disability benefits will usually be reduced or stopped to account for the extra income.
Documentation Required to File for Federal Early Retirement
Prior to filing for early retirement, you should get your paperwork in order. The relevant forms you'll need to fill out are:
- Form SF 2801 (Application for Immediate Retirement, CSRS and CSRS Offset)
- Form SF 3107 (Application for Immediate Retirement FERS and “Trans”FERS), and
- Form SF 144 (Statement of Prior Federal Service, if applicable).
You'll also need official documentation showing the following:
- your starting and finishing dates of federal service
- the effective dates of any promotions or pay increases within the last five years
- record of any time you worked as a temporary employee.
Meet with your agency's retirement counselor or HR department at least a year prior to your planned retirement date to make sure you understand the process and what's required.
Filing for Disability Retirement and Workers' Compensation
While you may file for both disability retirement benefits and workers’ comp benefits, you cannot collect both at the same time. If you’re approved for both, you will have to choose which benefits you want to receive at any given time.
There are a couple of exceptions to this rule, though. If you choose to receive disability retirement benefits, your medical treatment will still be covered through workers’ comp. You can also still receive a scheduled award through workers’ comp for any permanent disability that you have.
If you are eligible, it’s often a good idea to apply for both types of benefits. Because workers’ compensation may offer more benefits to start, you may want to collect workers’ comp benefits while keeping your disability retirement benefits on inactive status. Then, if your workers’ comp benefits were to terminate, you would have the disability benefits pre-approved as a back-up source of income.
However, the best strategy will depend on the facts in your particular case. To maximize your benefits, you should consult with an experienced workers' comp lawyer.