describes the differences between OWCP Benefits and Medical
Under an OPM approved disability retirement an employee would
receive the following: If covered by CSRS an “earned” annuity
computed under the general formula, however the law guarantees a
minimum annuity to employees who retire because of disability. If a
disabled workers earned annuity is less than the guaranteed minimum,
the minimum generally becomes the basic annuity. The guaranteed
minimum is not a fixed amount but varies from one an employee to
another based on age, service and average salary. It is the lesser
of the following: 40 % of the employees high three or the amount
obtained from the general formula after increasing the actual
creditable service by the time remaining from the commencing date of
the annuity to the date of the employees 60th birthday.
Disability benefits under FERS are based on the retirees age and
amount of service. Disability benefits are recalculated after the
first year and at age 62. If a disabled worker is under age 62 and
not eligible for immediate retirement the following benefits apply:
For the first twelve months 60% of the high three, minus 100% of any
Social Security Benefits. After the first twelve months 40% of the
high three minus 60% of any Social Security Benefits. Employees are
entitled to an earned annuity- of 1% of their high three multiplied
by years of service- if it is larger than their disability computed
under the other provisions. When an employee reaches age 62 The FERS
benefit is recalculated basing the calculation on the assumption an
employee worked to age 62. From the second year forward FERS
Disability benefit is indexed by the FERS cost of living formula
minus one percent. Under FERS Disability the employee must have
applied for Social Security Disability Benefits first.
Social Security Disability:
SSA benefits don’t begin until a five month waiting period expires
and continues until age 65 or until SSA determines the benefits not
longer apply. SSA does conduct a review every three years.
After disability retirement is approved OPM may also review the case
periodically. If OPM determines the employee is no longer disabled,
the annuity will be terminated after one year or upon reemployment
in the Federal Government. Disability annuities can continue after
reemployment based on the position and salary of the new position.
Under current law there is no tax benefit for disability payments
unless the employee is totally disabled for all gainful employment.
OPM bases the decision on whether you are disabled for your current
position or a vacant position of equal grade and pay. Employees
should always check with IRS.
Differences between FECA and
Most employees will choice a FECA retirement because it results in a
higher payment, mostly because FECA are tax free. Employees can
switch between the two choices if it results in a benefit to the
employee. However, employees should be aware their election can
result in a disadvantage. For example if an employee elects a OPM
retirement they are now considered an annuitant. If an employee
recovers and is reemployed by the federal government the employee is
now considered a rehired annuitant and is subjected to the rules
governing reemployed annuitants. Being subjected to those rules may
be disadvantageous if rehired at a lower grade and pay level. It is
also recommended that if an employee is eligible for an immediate
retirement that they should just retire so they are not subjected to
the medical requirements and a subsequent loss of benefits. On the
other hand certain job restoration rights are not available if you
elect an immediate retirement.
Approval of a disability retirement does protect future annuity
rights. If for some reason FECA benefits are cancelled an employee
is entitled to disability benefits.
Once approved by OPM and FECA for disability the employee must elect
which benefit they want to receive.
Simultaneous FECA and
In limited circumstances an employee can receive both benefits.
Since I believe Kim is a party to the DET Mold lawsuit this might
apply. If she receives a payment from a third party and FECA
suspends payments based on this settlement Kim could collect her OPM
benefits while she is receiving financial compensation from the
Refunds of Retirement
Employees who are receiving FECA benefits can receive a refund of
their federal retirement contributions however they must keep the
following in mind. If a separated CSRS employee receives the refund
and returns to duty the employee will forfeit all credit service,
unless the redeposit the refunded payment. The FERS employees loose
the time and the ability to make a deposit of the refunded payment
to regain the time. Taking a refund while on a FECA award can be
risky. While most employees believe the FECA will continue forever,
if the employee recovers they could be forced back into federal
Impact on Retirement:
An employee on LWOP while receiving FECA benefits will receive full
credits for the LWOP for retirement purposes. LWOP while receiving
FECA is not subjected to the normal limitation of only 6 months a
year. Typically an employee will stay on LWOP for a year, after a
year the employee usually will be separated. An employee receiving
FECA will stay on that benefit for as long as they qualify.
Partially disabled employees are compensated at 66 2/3% without
dependants and 75% with dependants. The pay rate used is based on
the date of injury and includes night differential, Sunday
differential, holiday pay, it doesn’t include overtime. Employees
receiving compensation are entitled to COLA increases each March.
The only deductions from compensation are health benefits.
Compensation payments are not subject to federal income tax. Other
benefit under FECA include medical care to include transportation
expenses, extra compensation during vocational rehabilitation and an
attendant where required. Employees can also collect unemployment
benefits while receiving FECA payments. FECA benefits are the same
for permanent total disability as those provided for temporary total
disability. There is no such thing as OWCP/FECA retirement. AN
employee receiving an FECA payment continues to receive said payment
until the condition no longer exists and or the employee has been
returned to government service. However once the employee returns to
federal employment all time outside is then creditable for a normal
Hopefully this helps but while it is still an individual decision
based on the info provided, it is almost always recommend the
employee stay on the FECA rolls in lieu of any other option.