Disability Retirement and You

Disability Retirement a Possibility

I doubt that any of us joined the Postal Service with the intention of becoming too disabled to complete our careers. Disability retirement is a very real possibility, though, for an accident, sudden illness, or chronic condition could render any of us unable to meet the requirements of our positions. And a sad reality in today’s Post Office is that management is not very compassionate when informed that a letter carrier can no longer deliver the mail.

It seems to matter little that the disabled person gave any number of his or her best years to the Postal Service. Nothing to my thinking would be sadder than to have a qualified, eligible employee quit the Postal Service in poor health instead of retiring due to the illness or injury. Like a manager of mine once said, "If you can't cut it any more, then get out."

Eligibility

Employees with either five years of service under the Civil Service Retirement System or 18 months under the Federal Employees Retirement System are eligible to apply for disability retirement, if they are unable to perform the essential requirements of their position. It is not necessary that the applicant be disabled for all types of work. For USPS employees, it is not necessary to accept a reassignment to another craft.

Employees seeking disability retirement have substantial rights before the Office of Personnel Management -- but such retirement applications are adjudicated, which can take many months while the ill or injured employee waits, often with no income.

Instead of having the applicant wait for an appointment with a USPS personnel assistant, who probably won't help the applicant beyond the provision of forms and the answering of questions, a branch officer can assist the applicant by helping him or her acquire and complete the forms and schedules. Since the forms are fairly intimidating and since accuracy is crucial, a knowledgeable and caring officer who can type neatly makes a world of difference in assisting the member to apply.

CSRS and FERS Compared

CSRS and FERS disability retirements have many similarities and a few striking differences. FERS applicants must first visit the nearest Social Security Office to apply for full Social Security disability benefits. Such benefits are predicated on complete disability or on a condition expected to result in death to the applicant.

CSRS and FERS Disability Annuities

The minimum disability annuity is calculated somewhat differently under each retirement plan. Under FERS, it is 60% of the current high three average less 100% of any Social Security benefits. After the first year the benefit is 40% of the high three average salary less 60% of any Social security benefit. At age 62 the annuity is recalculated to be the lesser of the disability benefit or the regular FERS retirement. CSRS disability benefits depend on the age and amount of service.

An applicant with 22 or more years receives the high three calculation, which will exceed 40%. An annuitant whose years of service to date and whose years remaining to achieve age 60 equal or exceed 22 years will receive 40%. An applicant whose years of service and remaining years to achieve age 60 equal less than 22 years will get a lesser annuity, based on the general formula actual calculation.

Necessary Forms

Following a decision on the the Social Security application, FERS applicants file with OPM. CSRS applicants make only one application, directly to OPM. In each case the retirement application is for an immediate annuity, and an additional disability forms package is also supplied, containing the application, the applicant’s statement of disability, medical evidence requests and schedules for declaring prior military service, past or present OWCP claims, and marital history.

The applicant must make some serious decisions with regard to optional life insurance and survivor annuity elections. One can elect to purchase higher insurance and one can choose to reduce or even eliminate survivor annuities with the notarized signature of the spouse. All of these necessary forms should be included along with instructions in the basic retirement forms package.

Earning Capacity Issues

Earning capacity is, simply, the measure of one’s ability to earn money through work. This is an issue of valid concern for disability annuitants who choose to resume gainful employment, including self-employment, prior to the sixtieth birthday. One is not prohibited from finding work following disability retirement, but when earnings exceed 80% of the current wages of the position from which one has retired, the annuitant is deemed to have regained his or her earning capacity, and the annuity is stopped after six additional months.

The 80% earnings ceiling is based on the wages of the annuitant’s former level and step as of December 31 of each year, which produces the most favorable comparison for the annuitant.\1,\2 Loss of the annuity because of restored earning capacity need not be permanent. Should one’s future annual earnings drop below 80% of the current wage, the annuity can be restored in the following year unless one has recovered medically.

Medical Substantiation Issues

Disability annuitants carry a burden of proving disability until the sixtieth birthday. Under both CSRS and FERS, the annuitant will be required to undergo periodic medical examinations until age sixty or until it is concluded that the disability will be permanent. Any such medical examinations are at the expense of the applicant.

Separation Issues

If the OPM has approved an application for disability retirement effective on expiration of accumulated and accrued leave, or if the employee is otherwise being separated for physical or mental disability resulting in inability to perform the work, sick leave is granted at the rate of 8 hours per day, 40 hours per week, or 80 hours per pay period until the leave is exhausted.\3

Also, for employees who have not been in a pay status the retirement date is calculated from the date when the pay status was terminated, not the date when the annuity was approved.\4 This back-filling of the annuity to the point when wages stopped permits FEHBP benefits to be restored in situations where the Postal Service canceled such benefits for non-deduction of the premium during the period of leave without pay prior to OPM approval.\5

Adjudication Issues

Upon receipt of an application for disability retirement, OPM will acknowledge the request and furnish the applicant a CSA number. This action does not indicate approval. The Disability and Special Entitlements Division, OPM, will examine the application and supporting documentation to determine whether a finding of disability is warranted and the applicant or the Postal Service may be contacted for further information.\6

If additional information is requested of the applicant, such a request should be viewed as extremely urgent. If a Disallowance Order is issued by OPM, appeal rights must be exercised precisely as instructed, and must be executed within the stipulated 30-day time limits.\7

Final decisions of OPM, including decisions regarding time limit failures, may be appealed to the Merit Systems Protection Board, and such appeals are open to all affected employees, not merely preference eligible veterans.\8 Such appeals are extremely serious, but are possible to win, especially if applicant incompetence can be shown.\9

1 Information for Disability Annuitants CSRS, OPM, § III, 5
2 Information for FERS Disability Annuitants, OPM, § III, 7
3 Employee and Labor Relations Manual, USPS, § 513.822
4 Duration of Annuity, Standard Form 2824-102, OPM, page 3
5 Section E - Insurance Information, Standard Form 2801, OPM, page 7
6 How Disability Applications Are Processed, Standard Form 2824-102, OPM, page 3
7 Time limits on reconsideration, 5 CFR Ch. 1 § 831.109(2)(e)
8 Appeals, 5 CFR Ch. 1 § 831.109(a)
9 Bridges v. Office of Personnel Management, 37 M.S.P.R. 290, 293 (1988)