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Disability Benefits Under the ECO Plan
If you are eligible for disability benefits, you might have the choice to receive benefits under the Regular/SLEP plan or under the ECO plan. To read about the differences in Disability benefits under the ECO plan, click here. |
Because IMRF reduces your IMRF disability payment based on your eligibility for Social Security or workers’ compensation, it’s very likely that your IMRF disability payments will be reduced before you receive payments from Social Security or workers’ compensation. If this causes you financial hardship, you may have the option to sign a Disability Payment Agreement.
You will need to talk to a Disability Claims Examiner if you want to consider a Disability Payment Agreement.
How does a Disability Payment Agreement work?
Signing a Disability Payment Agreement temporarily restores your IMRF disability payments to the full amount, even though you should be receiving a reduced amount.
However, if you are awarded Social Security or workers’ compensation benefits for the same period that IMRF paid you full disability benefits, you will need to pay the difference back to IMRF.
Why you will need to repay IMRF
Workers’ compensation, occupational disease, and Social Security benefits are awarded retroactively; therefore, those benefits will cover a period of time when IMRF should have been paying you a reduced benefit.
Because a reduction was not made and you were paid full IMRF disability benefits, you will need to repay IMRF the prepaid benefits (also known as prepayments).
How long do the restored benefits last?
Your disability benefit is restored to the full amount until one of the following events occurs:
- The month you reach your Full Retirement Age for Social Security
- The date the total of disability benefits you receive from IMRF equals 80% of your member contributions, or you are no longer disabled and entitled to IMRF disability benefits (20% of the balance in your member account is withheld for tax purposes), or
- You receive restored benefits equal to 80% of your member contributions, based on a prior claim that has not been repaid to IMRF.
What do I need to do if I want to enter into a Disability Payment Agreement?
Talk to a Disability Claims Examiner. They can determine your eligibility to enter into a Disability Payment Agreement.
Income Taxes
If you restore your benefits to their unreduced amount, you could end up paying more in income taxes. Learn more about how prepayments are handled for tax purposes here.