Federal Disability Retirement: A Paradigm for the Future

A disabling condition doesn’t have to be job related to qualify
A disabling condition doesn’t have to be job related to qualify.  Image by Francisco Zuasti from Pixabay.

With the national debt expanding, the annual deficits ever widening, the future of the Federal budget is on course for a self-determining collision with the reality of repaying debts owed.  Ordinary Americans must live in accordance with the restrictions of reality-based accounting principles or, as Mr. Micawber said in Dickens’ David Copperfield: “Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness.  Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery”

Where to cut in the federal budget?  What tax increases will be necessary?  These will be the two dominant questions for a future which will arrive sooner than we desire.  “Social programs” will likely be on the proverbial chopping block, as well, in order to achieve that mythical minerva of a “balanced budget”.  At such a time, perhaps a reactionary refrain about the need to “restructure” or “revamp” Civil Service benefits will likely arise.  There will be discussions and arguments about the issue, but in the end, all such policy questions can be boiled down to a simple but important economic refrain: Does a program incentivize or penalize?  In answering such a question, every Federal program needs a paradigm.  Fortunately, the Federal Government already has one:  The FERS Disability Retirement benefit.

Federal Disability Retirement is a benefit codified under 5 U.S.C. Section 8451. It allows for Federal employees who have a minimum of 18 months of federal service to apply for disability retirement benefits if a Federal or Postal employee is no longer able to perform one or more of the essential elements of his or her job, and no reasonable accommodations for the disability can be offered.  While there are many complex facets to the law, the focus for this article concerns the paradigm of this benefit in terms of incentivizing or penalizing.

The unique and incentivizing feature of OPM Disability Retirement benefits is that a Federal or Postal employee can retire from the Federal Government under these provisions, and then go out into the private sector (as well as state or county government) and earn up to 80% of what one’s former Federal position currently pays, and still continue to receive the disability retirement annuity.  Contrast this to the “penalizing” criteria of Social Security Disability benefits, where there is an onerous dollar amount capping and restricting the SSDI recipient, thus immediately penalizing any ideas of reentering the workforce.

Is it a self-contradiction to allow for a Federal Disability annuitant to be able to make what amounts to 120% of what his or her former position currently pays (up to 80% in the private sector, state or county governments, in addition to the 40% disability retirement annuity, calculated on the average of one’s highest-3 consecutive years of Federal Service)?  Why should a person who is purportedly “disabled” be allowed to “take advantage” of the system?  Isn’t it “unfair” for a person to receive a disability retirement benefit and then go out and earn wages that shows that he or she is actually not “disabled”?  Such questions, of course, go to the heart of why so many well-meaning federal programs fail at the outset, and add to the growing federal deficit — for, in the end, all such questions are mired in the policy approach of penalizing, as opposed to incentivizing.

From a policy perspective, the prefatory societal question should always include the following: Can a person who is disabled still make a valuable contribution to society?  Do we want to forever banish the experience, talents and acquired knowledge of a Federal or Postal employee and condemn him or her to the anonymity of a non-contributory class of former employees?  Or, can we recognize the obvious — that former federal employees are a valuable resource for our economy, and if they are still able to contribute to society, we should incentivize them to do so?

The unique feature within the laws governing Federal Disability Retirement Law — which allows for the 80% rule of incentivizing further contribution in the private sector or in state and county governments — is that a federal disability retirement is based not on an onerous criteria of “total disability”, but rather, upon the the idea that a person is found disabled from being unable to perform one or more of the “essential elements” of the particular job one holds.  If you think about it, such a standard is the more “reasonable” one.  For, a disabled individual is rarely entirely unproductive.  Rather, a specific disability — say, the loss of hand dexterity needed for an Orthopedic Surgeon working for the U.S. Department of Veterans Affairs — may qualify for Federal Disability Retirement benefits.  Yet, having granted the benefit, should that surgeon be barred from sharing his knowledge and experience by teaching at a medical school and earning up to 80% of what his former federal position currently pays, on top of the disability retirement annuity?

By incentivizing work, the federal program itself gains a further benefit: the individual goes on to contribute “back into the system” by working, paying taxes, sharing his or her acquired knowledge and experience, etc., and thus the system itself becomes a “self-paying” proposition.  That is, and should be, the key to any future discussions about cutting and slashing, and the Federal Disability Retirement benefit is the most progressive system which should be viewed as a paradigm in the coming years of inevitable concerns over the federal debt.


Robert R. McGill
FERS Disability Attorney


About the Author

Robert R. McGill, Esquire is a Federal Lawyer who specializes exclusively in fighting for Federal employees to obtain Federal Disability Retirement benefits.  He has been in private practice advocating on behalf of Federal employees for over 30 years.


This article was originally published in the HG.org directory (2/16/21)

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