It’s common for workers of all trades to be frightened at the prospect of disability. After all, federal disability payments are usually much lower than your ordinary income, and if you can’t work, what are you supposed to do?
Luckily, the Federal Employee Retirement System (FERS) has provisions to protect federal workers from this sort of risk. It’s known as the federal disability retirement benefit.
This benefit allows federal workers who meet the requirements the ability to retire early and offers several different options for receiving their pensions. If you think this program may be what you need, continue reading to learn exactly how these benefits work and how you can apply for them.
Federal Disability Retirement Benefits, Explained:
The Federal Employee Retirement System (FERS) is a policy designed to benefit-eligible government employees and workers in positions subject to FERS. Under FERS, as well as the Civil Service Retirement System (CSRS), employees of the agencies mentioned above are privy to many different retirement solutions, including:
- Voluntary Retirement
- Early Retirement
- Deferred Retirement
- Disability Retirement
The last option, disability retirement, is a special provision for federal employees who have become disabled and can no longer work.
Federal Disability Retirement Eligibility
The Office of Personnel Management (OPM) advises those who consider applying for federal disability retirement do so only after “you have provided your employing agency with complete documentation of your medical condition and your agency has exhausted all reasonable attempts to retain you in a productive capacity, through accommodation or reassignment.”
Additionally, OPM sets crystal-clear employee requirements on what must be done to qualify for federal disability retirement.
According to OPM, to be eligible for a FERS disability retirement annuity, you must:
- Have at least 18 months of federal civilian service under FERS.
- Have become disabled while working with the federal government to the point where you can not be reasonably accommodated or reassigned.
- Have a determined disability expectation time of greater than one year, as noted in medical exams.
- Have your employing agency certify that it cannot accommodate or reassign you to a position in the same geographical area that is similar in grade or pay level.
- Have either yourself or a guardian (or another interested legal party) apply for disability-based retirement BEFORE you separate from your current position OR within one year from the date of your separation.
The only exception for this rule is if you were deemed mentally incompetent before your separation from service or within the one-year window afterward. If this is the case, you must have a certification that verifies it.
- Submit a claim for Social Security benefits.
If you’ve met all of these requirements (or are in the process and can meet all of them soon), congratulations!
You are eligible to receive Federal Disability Retirement!
How are Federal Disability Retirement Benefits Calculated?
As you may have guessed, FERS disability retirement benefits are calculated differently than your regular retirement benefits. As a general rule, federal employees can apply for disability retirement at any age so long as they have met the service requirements.
However, this does not mean that all disability retirees will receive the same amount of compensation. There are many different compensation formulas depending on your circumstances, such as how many years of service you have or how old you are.
Many of these formulas involve your “High-3” average salary, which, according to OPM, is “the highest average basic pay you earned during any three consecutive years of service.” Usually, these are the final three years you worked before retirement, but it can be any set of three years.
The primary factor that affects how much you’ll be paid is whether you are under or over age 62 (the current retirement age for immediate voluntary retirement).
If you are age 62 or over, your benefits are calculated as follows:
- 1% of your high-3 average salary is multiplied by your years and months of service.
However, if you are age 62 or over with at least 20 years of service, your benefits will be slightly higher:
- 1.1% of your high-3 average salary is multiplied by your years and months of service.
If you are under age 62, your disability benefits are calculated as follows:
- For the first 12 months, you will receive 60% of your high-3 average salary minus the total amount of Social Security disability benefits you receive during that time.
- After the first 12 months, you receive 40% of your high-3 average salary minus 60% of your total Social Security benefits.
- You may also receive 1% of your high-3 average salary multiplied by your years and months of service instead – if that amount is larger than either or both of the above.
How to Apply for FERS Disability Retirement Benefits:
To apply for disability retirement benefits, you must fill out two forms.
- Form SF 3107, Application for Immediate Retirement
- Form SF 3112, Documentation in Support of Disability Retirement
Additionally, suppose you are under the age of 62. In that case, you will also be required to submit documentation that certifies you have submitted an application for disability benefits through Social Security once you’ve left your job.
These forms can seem overwhelming to fill out for some, but don’t worry. If it has been less than 31 days since you’ve left your employer, you may be able to receive help from them in filling out your information and sending it in.
However, if it has been greater than 31 days, this may not be an option, as your employer may no longer have your personnel records. If this is the case, don’t fret. You can always contact one of our retirement planners to help you fill out these forms and get you prepared for disability retirement.
Federal disability retirement is an excellent option for those who find themselves no longer able to do their jobs due to a disability. It provides an ideal safety net and ensures you are taken care of in the face of the unthinkable.
Remember that timing is critical in applying for disability-based retirement, so you’ll want to act quickly once you decide that it is the route you must take.
If you are running out of time to act and you’re still unclear on what to do or how to do it, it is imperative you connect with our dedicated retirement planner who can help you throughout the process.
At Federal Benefit Advisory, our planners are experts in federal retirement, and their sole purpose is to help you retire comfortably and securely. Reach out today to get started with your federal retirement.