Disability Retirement

Feds with chronic medical conditions can collect retirement benefits after leaving government.

Career-stopping chronic medical conditions don't have to leave federal employees out in the cold. Those facing an early end to their time in government because of illness or injury can take advantage of the Office of Personnel Management's disability retirement program, which allows workers to seek other employment while receiving checks for their federal service.

"OPM disability retirement is a very progressive paradigm in that it allows for federal and postal workers to receive compensation for being unable to work in a particular kind of job and yet allows them to still be productive in society," said Robert McGill, a Maryland-based attorney who specializes in disability retirement benefits for government employees. The program also allows federal employees to retain health benefits, and the time accrued during disability retirement counts toward total years of service used to calculate retirement annuity at age 62, he noted.

According to OPM, Civil Service Retirement System enrollees age 60 or younger who aren't receiving military retired pay or veterans compensation are guaranteed at least 40 percent of their high-three average salary or the annuity they would have earned if they had continued working to age 60, whichever is less. Federal Employees Retirement System participants younger than 62 years of age earn 60 percent of their high-three salary, though after 12 months, benefits drop to 40 percent. Participants can seek employment outside government and retain disability retirement status as long as their salaries don't exceed 80 percent of their previous federal pay.

McGill recommends federal employees consider disability retirement if their condition affects day-to-day job performance; a physician has deemed their situation chronic; or they go home each night needing to recuperate for the following day.

OPM requires federal workers seeking these benefits to have a medical assessment supporting a disability diagnosis that affects their ability to perform their jobs. The condition must be expected to last more than one year, and the employing agency must be unable to accommodate or reassign the applicant to a vacant position at the same pay and grade level. Employees must apply for the benefit within one year of being separated from federal service.

All CSRS retirees, including those seeking disability retirement, must complete form SF 2801. FERS participants should use SF 3107. To start the disability retirement process, applicants also will fill out SF 3112, which includes forms to be completed by the employee, supervisor and physician.

But workers seeking disability retirement shouldn't expect to receive their first check right away, due to processing backlogs, McGill said. He noted federal workers often wait six to 10 months for disability payments once the process begins.

Employees injured on the job also can apply for disability benefits through the Labor Department's Office of Workers' Compensation Programs, but they cannot receive payments from both programs simultaneously. In addition, workers collecting Social Security will see a reduction in their disability retirement.

"If a person is no longer able to perform efficient service to the federal government, the option would be termination or separation from service for failing to be able to perform his or her job," McGill said. "[Disability retirement] at least allows for a base annuity. It allows the person to have period of time for recuperation, for taking care of the medical condition, and [to] continue to seek to get better. Then many people seek another type of employment that is not same as what they did in federal government."