How Does Federal Social Security Disability Retirement Work?

Under CSRS and FERS, Employees are eligible for disability benefits if they are disabled and cannot perform their jobs efficiently. However, to be eligible to apply for disability retirement, a CSRS employee must have completed a minimum of five years of creditable civilian service. A FERS employee must complete at least 18 months of federal service.

Due to CSRS’s closure to new employees a few years back, anyone who left and later returned to the workforce as an offset CSRS employee would have completed the required five years of service. Thus, the latter provision is now debatable.

Applicants for disability retirement would need to fill out the standard form 3112 and send it to the Office of Personnel Management. Some agencies help their employees with this process. In addition to the form, the agency must attest that the individual can’t provide efficient services in their current position, even when necessary adjustments are made to the working conditions; and that there’s no other vacant position within the agency and the employees commuting area that’s of the same grade and pay (note that there may be additional conditions from collective bargaining agreements).

FERS employees and CSRS offset must apply to Social Security for disability retirement since it covers them. The SSA standards for determining disability are different and more complex. To be considered disabled, an individual must be very disabled that they can’t engage in any form of substantially gainful employment.

If a FERS employee under age 62 is considered disabled, they will receive 60% of the high-3 minus Social Security disability benefit, which they are entitled to for the first twelve months. After that, the amount is reduced to 40%, minus 60% of Social Security benefits.

For a CSRS employee, they’ll receive 40% of their high-3 years of average salary or the amount that results from increasing their actual years of service from the date of the disability to age 60. As such, a 40% calculation is the guaranteed minimum they’ll get.

Whether you are a FERS or CSRS employee, if your earned benefit calculated based on your years of service exceeds these amounts, then that’s what you’ll get. As a FERS employee, if you can work from the onset of the disability to age 62, your whole benefits will be recalculated.

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