You can collect a FERS annuity and Social Security Disability Insurance at the same time. Whether the two checks arrive intact depends on which kind of FERS retirement you’re on: regular retirees keep both in full, while FERS disability retirees see their annuity reduced by most or all of the SSDI payment, especially in the first year.
The Offset for FERS Disability Retirees
FERS disability retirement pays a generous share of your high-3 average salary, and the price of that generosity is a built-in reduction when SSDI also pays out. The reduction runs in two phases.1Office of Personnel Management. Information for FERS Annuitants
- During the first 12 months, your FERS disability annuity equals 60 percent of your high-3, reduced by 100 percent of your SSDI benefit. Every dollar of SSDI comes straight out of the FERS check.
- After 12 months, the annuity drops to 40 percent of your high-3, reduced by 60 percent of your SSDI benefit. The offset is smaller, but so is the base.
The combined payment from both programs is still higher than either alone. What surprises people is how thin the FERS portion gets once SSDI kicks in, particularly in year one.
One boundary matters here. These offset formulas apply only if you were under 62 and did not meet the age-and-service requirements for regular voluntary retirement when you separated. If you already qualified for voluntary retirement at separation, OPM computes your annuity under the standard formula and the offset above does not apply.1Office of Personnel Management. Information for FERS Annuitants
No Offset for Regular FERS Retirees
If you retired under regular FERS rules based on age and years of service, a later SSDI award does not reduce your annuity. You collect both in full. FERS employment is covered by Social Security, so you paid into both systems throughout your career. OPM states it plainly: “If you are eligible for both a FERS annuity and Social Security benefits and have not retired on a FERS disability annuity, you can receive both benefits at the same time.”1Office of Personnel Management. Information for FERS Annuitants
The Windfall Elimination Provision and Government Pension Offset don’t apply to FERS retirees either. Those rules reach people whose pensions came from work not covered by Social Security, generally the older Civil Service Retirement System or similar non-covered plans.
The Waiting Period and Overpayment Problem
SSDI doesn’t pay right away. After Social Security finds you disabled, a five-month waiting period runs before benefits start; your first check covers the sixth full month after your disability onset date.2Social Security Administration. Is There a Waiting Period for Social Security Disability
Meanwhile, your FERS disability annuity usually begins before SSDI is even decided. During those months, OPM pays your full disability annuity with no offset. Once SSDI is finally approved, often with a retroactive lump sum, OPM discovers it overpaid you, because the offset should have applied from day one.1Office of Personnel Management. Information for FERS Annuitants
OPM will come to collect. The agency’s own pamphlet warns retirees not to spend the retroactive SSDI check, because it’s the money you’ll need to repay OPM for the reduction that should have been in place. As soon as SSDI is awarded, you’re required to notify OPM of the monthly benefit amount and the effective date. The longer you wait, the larger the overpayment grows.1Office of Personnel Management. Information for FERS Annuitants
What Changes at Age 62
When you turn 62, OPM automatically recalculates your FERS disability annuity as a regular earned annuity. The math treats you as if you had kept working: OPM adds your actual creditable service to the time you spent on disability retirement (up to the day before your 62nd birthday) and may credit unused sick leave from separation.3Office of Personnel Management. SF 3112-2, Information About Disability Retirement (FERS)
The standard FERS formula then applies: 1 percent of your high-3 multiplied by total years of service, or 1.1 percent if that total reaches 20 years or more. Your high-3 is also adjusted upward by every FERS cost-of-living increase that occurred during your time on disability, including any that didn’t affect your disability payment when they happened.3Office of Personnel Management. SF 3112-2, Information About Disability Retirement (FERS)
Once the annuity converts, the Social Security offset ends. Your FERS annuity and any SSDI or Social Security retirement benefit run independently from that point forward, and the converted amount usually lands close to what you had been receiving as a disability retiree.
You Must Apply for Both
If you’re seeking FERS disability retirement, applying for SSDI is not optional. OPM will not process your FERS disability application without proof that you filed with Social Security. Withdraw the SSDI application and OPM dismisses the FERS claim.3Office of Personnel Management. SF 3112-2, Information About Disability Retirement (FERS)
You don’t have to be approved for SSDI, only to apply. The two programs use different disability standards. FERS asks whether you can perform your specific federal job; SSDI asks whether you can perform any substantial gainful activity. Many federal employees are approved for FERS disability and denied SSDI. If Social Security denies your claim, include the denial notice with your FERS package and the application can still move forward.4Office of Personnel Management. Documentation in Support of Disability Retirement Application
Working While Receiving Both
Both programs allow limited work, and each has its own earnings tripwire. Crossing either one can end that benefit, independently of the other.
SSDI’s Trial Work Period and SGA Limit
SSDI provides a trial work period: nine months (not necessarily consecutive) within any rolling 60-month window during which you can test your ability to work without losing benefits. In 2026, any month you earn $1,210 or more before taxes counts as a trial work month.5Choose Work! Fact Sheet – Trial Work Period 2026
After the nine months are used up, SSA looks at whether your earnings exceed the substantial gainful activity threshold, which is $1,690 per month in 2026 ($2,830 if you are statutorily blind). Cross that line and SSDI stops.6Social Security Administration. Substantial Gainful Activity
FERS Restoration of Earning Capacity
FERS uses a different test. If you are under 60 and your wages or self-employment income in a calendar year reach 80 percent of the current pay rate for the position you held before retirement, OPM treats your earning capacity as restored. Your disability annuity terminates the following June 30.7eCFR. 5 CFR 844.402 – Restoration of Earning Capacity
All FERS disability annuitants under 60 must report their annual earnings to OPM. The 80-percent threshold is measured against the current pay rate for your old position, not what you were making when you left, so the number moves with pay raises.
Cost-of-Living Adjustments on the Combined Benefit
FERS disability retirees receive no cost-of-living adjustment during the first year on the 60-percent formula. Once the annuity drops to the 40-percent formula in year two, COLAs begin applying to both the annuity and the Social Security offset.8eCFR. 5 CFR Part 841 Subpart G – Cost-of-Living Adjustments
FERS COLAs are also capped below Social Security’s. If the CPI increase is 2 percent or less, you get the full amount. Between 2 and 3 percent, your COLA is capped at 2 percent. Above 3 percent, your COLA is 1 percentage point less than the CPI. Over a long disability retirement, the gap between the FERS COLA and the full Social Security COLA gradually erodes the purchasing power of the FERS portion.9U.S. Office of Personnel Management. How Is the Cost-of-Living Adjustment (COLA) Determined
How the Two Checks Are Taxed
If you retire on FERS disability before reaching the minimum retirement age, your annuity payments are taxed as wages, reported on line 1h of Form 1040. Once you reach the minimum retirement age, they shift to pension and annuity treatment on lines 5a and 5b.10Internal Revenue Service. Publication 907, Tax Highlights for Persons With Disabilities
The FERS minimum retirement age runs from 55 to 57 depending on your birth year: 55 if you were born before 1948, 56 if you were born between 1953 and 1964, and 57 if you were born in 1970 or later.11U.S. Office of Personnel Management. Eligibility
SSDI can be taxable too. If your combined income (adjusted gross income, plus nontaxable interest, plus half your Social Security benefits) exceeds the IRS thresholds, up to 85 percent of your SSDI can be subject to federal income tax. Receiving both a FERS disability annuity and SSDI makes crossing those thresholds more likely.