Confused! Lump Sums...Structured Payments? What??

[Wink]

I have read on different forums of people who have accepted Workers' Comp Lump Sums..but had a certain "language" written into their WC agreement to show the Social Security Disabilty Adminstration that their WC settlement was structured as payments over a period of time--the longer the better. What I'm understanding is that this is done so that they have LESS of a SSDI money offset...hence, maximizing their SSDI checks.

Now...to me, accepting a Lump Sum check is just that--a Lump Sum. So how in the world could it possibly be recognized as Structured Payments (as if one is receiving minimized weekly payments from the Workers' Comp Settlement?)

[FormerDE]

I have read on different forums of people who have accepted Workers' Comp Lump Sums..but had a certain "language" written into their WC agreement to show the Social Security Disabilty Adminstration that their WC settlement was structured as payments over a period of time--the longer the better. What I'm understanding is that this is done so that they have LESS of a SSDI money offset...hence, maximizing their SSDI checks.

Now...to me, accepting a Lump Sum check is just that--a Lump Sum. So how in the world could it possibly be recognized as Structured Payments (as if one is receiving minimized weekly payments from the Workers' Comp Settlement?)
___________________________

Social Security tries to minimize the effect that your W/C offset LS payment has against the amount of SSDI that is payable to you. In other words, SSA tries to reduce the amount of offset of your SSDI benefits by the W/C lump sum. It does that by substracting your excludable medical and attorney fees (usually shown in the lump sum award statement itself) from the amount of the offset, allowing more payment of SSDI to you. Some people are helped most (get the most SSDI) by applying all the excludable expenses up front for as many months as needed to recoup them, meaning that those early months have no SSDI "offseted." This would be advantageous, for instance, if you are near retirement age when offset would no longer apply (since W/C offset does not apply to a retirement benefit). But in other cases, it may be more advantageous for a claimant to have the offset applied at the beginning at the lowest level for the longest period, particularly for those who have a high SSDI benefit rate, because that high benefit rate may result in no offset at all per month, or only a very small amount of offset. The key in all of the calculations (there are 3 basic but very complicated ones) is that SSA tries to find the best calculation method that results in you getting the most SSDI benefits with the least amount of W/C offset applied. The calculations are complicated, but, if interested, you can read about them in POMS DI 52001.555, particularly sections H and I of that reference. I've included the web address below, which I hope works accurately:

https://s044a90.ssa.gov/apps10/poms.nsf/517e83681a5eb8b28525688d0058721c/baf597f67308e13885256e31006676a4!OpenDocument


FormerDE

[Wink]

___________________________

Social Security tries to minimize the effect that your W/C offset LS payment has against the amount of SSDI that is payable to you. In other words, SSA tries to reduce the amount of offset of your SSDI benefits by the W/C lump sum. It does that by substracting your excludable medical and attorney fees (usually shown in the lump sum award statement itself) from the amount of the offset, allowing more payment of SSDI to you. Some people are helped most (get the most SSDI) by applying all the excludable expenses up front for as many months as needed to recoup them, meaning that those early months have no SSDI "offseted." This would be advantageous, for instance, if you are near retirement age when offset would no longer apply (since W/C offset does not apply to a retirement benefit). But in other cases, it may be more advantageous for a claimant to have the offset applied at the beginning at the lowest level for the longest period, particularly for those who have a high SSDI benefit rate, because that high benefit rate may result in no offset at all per month, or only a very small amount of offset. The key in all of the calculations (there are 3 basic but very complicated ones) is that SSA tries to find the best calculation method that results in you getting the most SSDI benefits with the least amount of W/C offset applied. The calculations are complicated, but, if interested, you can read about them in POMS DI 52001.555, particularly sections H and I of that reference. I've included the web address below, which I hope works accurately:

https://s044a90.ssa.gov/apps10/poms.nsf/517e83681a5eb8b28525688d0058721c/baf597f67308e13885256e31006676a4!OpenDocument


FormerDE

Thanks, FormerDE. I do appreciate your time, knowledge and thoughts. I'll click on that link and try to understand all that I can. I don't know if you know my case, but the WC Commissioner awarded me Total Permanent Disability and Future Medicals, and haven't settled just yet. I just don't want to make a stupid move (presently) regarding the wording of my WC settlement. See? I've read some horror stories about the settlement mix, so to speak, of Workers' Comp and SSDI. It's scary stuff!

Thanks again,
Wink

[Wink]

Whew! I really feel slow, now!! FormerDE, Prorating a Workers' Compensation IS complicated (I'll have to read over all of that 20 times before I near some understanding).

Ok, so the Social Security Disability Administration will attempt to give me the best possible calculation. But like many have warned me: I need to first make certain that there is the proper wording within my Workers' Comp Settlement document/agreement. Someone just today, finally, told me that because of a Lump Sum, what I need to have written in is the Utica Mohawk clause--that without it the SSDI offset will not be reduced but raised higher--no matter what the best calculation given me.

What do you think? Have you ever heard of this Utica Mohawk clause?

Thanks!
Wink

[FormerDE]

Whew! I really feel slow, now!! FormerDE, Prorating a Workers' Compensation IS complicated (I'll have to read over all of that 20 times before I near some understanding).

Ok, so the Social Security Disability Administration will attempt to give me the best possible calculation. But like many have warned me: I need to first make certain that there is the proper wording within my Workers' Comp Settlement document/agreement. Someone just today, finally, told me that because of a Lump Sum, what I need to have written in is the Utica Mohawk clause--that without it the SSDI offset will not be reduced but raised higher--no matter what the best calculation given me.

What do you think? Have you ever heard of this Utica Mohawk clause?

Thanks!
Wink

To tell the truth, I've never heard of the Utica Mohawk clause. When I worked as a SSA claims authorizer many years ago, doing W/C comp offsets on SSDI, I had in file (or requested) the finished W/C lump sum authorization document, so I can't say that I know exactly what process went into the making of the final authorization document. I do know that if there were medical and legal expenses listed on the lump sum authorization, we always did the 3 separate calculations as a matter of course to determine what was the best outcome for the claimant (i.e., what of the 3 calculations mentioned above resulted in the most payable SSDI benefits after offset). It's not something you even have to request; SSA simply does the calculations as a matter of procedure and gives you the best option. In some cases where the best option might be questionable or not that clear cut, we would contact the claimant to see what method of offset he or she would prefer.

And you are right, the calculations are VERY complex. Fortunately, SSA now has a computer program that does the calculations based on data the claims authorizer inputs, which cuts out a lot of possible mistakes in calculation. When I first started with SSA, we actually did those calculations with a hand calculator only!


FormerDE

[Wink]

Thanks, FormerDE! I really want you to know that I appreciate the time you have given me. Thank you so much!

I'm going to try to Google the Utica Mohawk Clause. Per chance I'll find something on it that I'll be able to understand. If I find something worthwhile, I'll post it back here and on the Workers' Compensation Forum. I think it may be worthwhile for those who are dealing with Workers' Comp and SSDI issues.

Wink

[backless]

hey old friend,fell upon this site the other day,might be of help http://library.findlaw.com/1999/Sep/1/126905.html