Disability Retirement
- Who May Apply
- How to Apply
- Processing the Claim
- Effective Date
- Benefit Payments
- Returning to Employment
Who May Apply
You may apply for disability retirement if you become physically or mentally incapable of performing the regular duties of your job and your disability is likely to be permanent. Becoming disabled does not automatically qualify you for disability retirement; you must file an application and go through the review process.
The Retirement Systems must receive your disability retirement application within 90 days of the date of your termination from covered employment.
You must have at least five years of earned service credit toward retirement unless your disability is the result of an injury arising out of and in the course of the performance of your job duties.
You may arrange with your employer to make your Retirement Systems’ contributions through your employer if your disability requires you to be placed in an employer-approved leave status while receiving workers’ compensation benefits. Doing so will ensure that you continue to earn Retirement Systems service credit during your workers’ compensation leave period.
Do not wait to apply for disability benefits until your workers’ compensation claim is finalized. Many workers’ compensation claims are often settled after covered employment has ended.
If your disability claim is denied, the continuance of paying contributions and earning Retirement Systems service credit may be important to your long-term retirement plans. Retired members who work for a covered employer are not eligible to apply for disability benefits.
How to Apply
If you meet the disability filing criteria, go to the Forms section of our website or contact the Retirement Systems for a disability retirement packet. When you file your disability retirement claim, please complete all of the forms in the disability retirement packet. You do not, however, need to include any medical records from your health care providers.
You should file your application for disability retirement as soon as you become disabled. The Retirement Systems must receive your disability application within 90 days of the date of termination from your covered employment or you will not be eligible to participate in the disability retirement program.
If you do not receive notification in the mail confirming receipt of your application within 10 days after you submit it, please contact the Retirement Systems.
If you are eligible for service retirement when you become disabled, you may apply for service retirement and begin receiving benefits while awaiting determination of your disability claim; however, you will receive only one type of payment, so if your disability claim is approved, the service retirement benefit will cease.
Processing the Claim
Your medical records will be obtained from your health care providers by our disability determination provider and evaluated to determine the severity and limiting effects of your physical or mental impairment. The final determination is made by the Retirement Systems. If your claim is denied, you will have an opportunity to appeal that denial.
Please allow a minimum of three months after all required documentation has been received from you, your employer, and your health care providers for your disability application to be processed. If you have not received the Retirement Systems' decision within three months, please contact the Retirement Systems.
Effective Date
If your disability retirement claim is approved, the effective date for benefits will be the 30th day after your application is received by the Retirement Systems or the day after your last day on your employer’s payroll, whichever is later.
A disability benefit, once approved, may be discontinued if:
- You regain a certain earning capacity; or
- Medical evidence indicates that you are no longer disabled; or
- Your disability benefits were not approved following a continuing disability review.
Periodic medical reexaminations may be required up to age 65. If the Retirement Systems determines that your disability benefits should cease because of an improvement in your medical condition, your retirement benefits will stop the month of your scheduled review or the month of the Retirement Systems’ decision, whichever is later.
Benefit Payments
A disability applicant may select the same payment plans as a service retiree.
Because the Retirement Systems does not determine your disability based on the criteria for a disability that is total and permanent, like Social Security, your disability benefits are considered to be a normal distribution from your retirement account. For tax information, contact the Internal Revenue Service, the SC Department of Revenue if you live in South Carolina, and/or your personal tax advisor.
Disability benefits paid under SCRS are based on approval for an occupational or job-related disability. Per Internal Revenue Service guidelines, all such benefits are reported as normal distributions with a distribution code of 7 on Internal Revenue Service Form 1099-R.
If you also receive benefits from the Social Security Administration that are based on total and permanent disability, such benefits are reported to you with a distribution code of 3 on Internal Revenue Service Form 1099-R. If you are considered to be totally and permanently disabled, benefits paid by the Retirement Systems may be eligible for additional tax credits. Please have your tax advisor refer to the instructions for completing Internal Revenue Service Schedule R in preparing your income tax return.
Returning to Employment While Receiving a Disability Retirement Benefit
If you are under age 65 and receiving an SCRS disability benefit, you should report earnings from any gainful (public or private) employment to the Retirement Systems annually because there is an earnings limitation for all employment which is applied on a calendar-year basis. You may earn the difference between your adjusted average final compensation at retirement and your disability retirement benefit without affecting your retirement benefits (see example below).
Example
Average final compensation at retirement (adjusted for inflation) |
$35,000 |
Annual disability retirement annuity |
- $14,950 |
Disability retiree can earn difference (for the calendar year) |
$20,050 |
Your average final compensation may be adjusted each year for inflation for earnings limitation purposes only. This increase generally matches the percentage increase of the Consumer Price Index for Wage Earners and Clerical Workers. These adjustments affect the amount you can earn while receiving a disability retirement benefit; however, they do not affect the amount of your benefit. You will receive a letter each February advising you on how much you can earn and requesting confirmation of your prior year earnings. You will have to repay any benefits that you received to which you were not entitled.
If you earn more than the difference between your adjusted average final compensation and your disability benefit amount, your monthly benefit will be reduced or possibly canceled. If you return to work with an employer covered by the Retirement Systems and your annual earnable compensation is equal to or greater than your adjusted average final compensation, your disability retirement benefit ceases and you must become an active member of the system.
At age 65, there is no earnings limitation for public or private employment.