OPM Disability Retirement: The 80% Rule — Earned Income

Last Updated on December 16, 2010 by FERS Disability Attorney

As we reach the end of the year, Federal and Postal employees who are receiving Disability Retirement benefits, and who are working in the private sector, should remember the 80% earned income rule.  Be aware that a Federal or Postal employee who is under FERS or CSRS, and who is receiving a Federal Disability Retirement annuity, is allowed to make up to 80% of what one’s former position currently pays.  

While it is sometimes difficult to ascertain what the current pay scale is (and the Office of Personnel Management is often completely unhelpful, whether deliberately or inadvertently), it is best to always estimate “down”, so that one is never in danger of exceeding the cap.  Further, if the Federal or Postal employee in any given year exceeds the cap, then reinstatement of the Federal Disability Retirement annuity is allowable if in any succeeding year, he or she goes back under the 80% ceiling.  It is important to keep an eye on one’s earned income if one is to continue to maintain a Federal Disability Retirement annuity.  Planning is the key to the entire process.

Sincerely,

Robert R. McGill, Esquire