Colorado is what is known as a “reverse offset state,” which means that Colorado workers’ compensation benefits are reduced (or offset) by Social Security disability benefits.
It is called “reverse offset” because in most other states Social Security is reduced if you get workers’ comp benefits.
If you receive Colorado workers’ compensation benefits, your benefits will be reduced during any month that you are also eligible for Social Security benefits.
The reduction is one-half of the Social Security benefits you were entitled to when your Social Security was first awarded. This is also called your “initial entitlement amount” or “primary insurance amount.”
For example, if your workers’ comp benefits are $1,000 per month, and your Social Security (initial entitlement amount) was $500 per month, your workers’ comp would be reduced to by $250, down to $750.
There is currently a bill pending in the Colorado Legislature (SB 110-187) that would eliminate the offset for Permanent Partial Disability benefits (PPD). We will keep you posted if that passes.