I receive calls periodically as to whether it is of greater advantage to remain on Worker’s Comp (Department of Labor, Office of Workers Compensation Program — “OWCP”) as opposed to going out on OPM Disability Retirement. My answer remains the same: OWCP is not a retirement system; OPM disability retirement is indeed that — it is a retirement, where one is separated from Federal Service, and you go out and do what you want to with your life. Every decision has consequences; every act which we engage in has inherent residual effects, and we have to balance such effects and consequences. Thus, while OWCP benefits pay a higher rate (75% tax free with a dependent; 66 2/3% tax free without a dependent), there are restrictions: You must comply with any and all requests (or demands) of the Department of Labor; you cannot go out and get another job, or start another career — because you are deemed “disabled” and are being paid for it. On the other hand, OPM disability retirement pays less (for FERS, 60% the first year, 40% every year thereafter), but you have the freedom of retirement — you may go out and start another career, and make up to 80% of what your former position currently pays, without losing your disability annuity. These — and many other factors — are some things to consider when weighing the differences between OPM disability retirement, and receiving OWCP/DOL benefits.
Robert R. McGill, Esquire