Can You Collect Workers’ Compensation and Retirement?

Workers’ compensation — or workers’ comp, as it is most often called — is a form of insurance that provides benefits to employees who suffer work-related injuries or illnesses. It offers benefits for wage replacement and medical treatment, among other things. It was set in place so that employees could receive fair compensation for injuries without having to sue their employers which, believe it or not, used to be the case.

If you happen to be among those individuals ready to retire and are also eligible for workers’ comp benefits, you might wonder if you can receive both. Let’s take a look.

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How does retirement affect my workers’ compensation benefits?

Retirement itself shouldn’t affect your eligibility for workers’ compensation benefits. The primary determining factor for receiving workers’ comp is whether the injury or illness is work-related. 

As long as the employee can prove that the condition happened during their employment, retirement should not impact anything.

If these conditions were met, the individual may continue to receive workers’ compensation benefits for as long as the injury or illness requires medical treatment or results in a loss of wages. In fact, you can still pursue the claim after retirement as long as it meets the requirements, happened during employment, and hasn’t exceeded the statute of limitations.

Does Colorado’s no-fault system affect workers’ compensation?

Colorado follows a no-fault system when it comes to workers’ compensation, meaning that employees are generally entitled to benefits regardless of who caused the accident or injury. This includes injuries caused by their own negligence.

Can I sue my employer if I receive workers’ compensation benefits?

In most cases, employees cannot sue their employers for work-related injuries if they are already receiving workers’ compensation benefits. Workers’ compensation is designed to provide financial support to injured employees without having to go through the traditional legal process. 

However, there may be exceptions if the injury was a result of intentional harm caused by the employer or due to gross negligence. While proving these situations can be challenging, it’s not impossible. It does require substantial evidence and the skill of a trusted attorney, but it’s probably worth pursuing if you are in this situation.

Also, some employers may be exempt from carrying workers’ comp insurance because of their size, classification, or other specific circumstances. If this is the case, that opens the door to potential legal action. 

Can you collect workers’ compensation benefits for mental health injuries?

Yes! In short, workers’ compensation benefits are not limited to physical injuries. They can also cover other things, including mental health illnesses — as long as they are a direct result of work-related conditions. However, the connection between the mental health issue and the workplace can be more challenging to establish. 

In recent years, issues like work-related stress and trauma have become more recognized. Because of this, workers’ compensation laws have evolved to include mental health conditions. The compensation for such conditions can include coverage for post-traumatic stress disorder (PTSD), anxiety, depression, and other mental health injuries.

Adequate medical evidence and documentation are the key to proving the case. This could involve getting expert opinions from mental health professionals. The medical evidence will have to show a direct connection between the condition and the workplace.

How do I collect unemployment?

Unemployment benefits are separate from workers’ compensation benefits and are typically available to people who are temporarily out of work due to layoffs or other things beyond their control.

If an employee is receiving workers’ compensation benefits, they may still be eligible for unemployment benefits, depending on the circumstances. However, it’s important to follow the specific guidelines of your state unemployment agency to determine eligibility. 

Filing for unemployment is a fairly straightforward process. Since the rules can be different for each state, start by searching online for your state’s unemployment office. There will be an online form you can fill out or a number you can call. 

Once you’ve submitted your application, they will review it and respond to your request. If you are denied, you should be able to appeal the decision if you still feel you are entitled to the benefits.

Can I retire while on workers’ compensation?

Retiring while receiving workers’ compensation benefits is possible. However, retiring voluntarily may impact certain aspects of the benefits received. 

When it comes to wage loss and income replacement, it’s important to note that these benefits may not apply in cases of partial disability. Partial disability usually means a person can still work but has certain limitations or reduced earning capacity.

For example, if an employee is partially disabled, retiring may affect wage loss and income replacement benefits. Medical coverage may still be available, but you’ll have to meet certain requirements. These will probably include reporting the injury to the employer within 30 days, filing a claim within the statute of limitations, and choosing a doctor from a list approved by the employer.

What is the statute of limitations for filing a workers’ compensation claim?

Each state may vary a little in its statute of limitations for filing these types of cases. In Colorado, the statute of limitations is generally two years. This means you have this amount of time from the date of the injury to file your claim.


In certain cases, however, that time period can be extended to three years as long as you have a “reasonable excuse” for not filing on time. 

Is it best to settle the case before retiring?

Deciding whether you should settle a workers’ compensation case before retiring depends on a few different things. These could include the extent of the injury, ongoing medical treatment, and the financial impact on the individual. 

Settling a case before retiring could possibly result in a lump sum payment that can provide some financial security during retirement. However, it’s important to consult with a workers’ compensation attorney to fully understand the implications and ensure the settlement is in your best interest.

Can I afford a workers’ compensation attorney?

Hiring a workers’ compensation attorney can help you more easily navigate the complex legal process and ensure that your rights are protected. But we do understand that the cost can be an issue.

Many workers’ compensation attorneys work on a contingency fee basis, meaning they only receive payment if they successfully secure your benefits. This arrangement helps injured employees access legal representation without upfront costs. 

At Bachus & Schanker, we also offer free consultations, which means no risk to you and no upfront cost. During your free consultation, we will explore your case in detail and advise you of any costs you may incur.

When to contact an attorney

A workers' comp attorney stands at his desk. On it is a gavel, a tablet, and a stack of books.

Collecting workers’ compensation benefits while receiving retirement benefits is generally possible since retirement doesn’t automatically disqualify anyone. However, various factors can influence the specific benefits received, eligibility for retirement, and potential legal actions against employers. 

It’s important to understand the regulations of the workers’ compensation system, consult with professionals, and consider hiring an attorney to ensure your rights are protected throughout the process. By getting the right information and expert guidance, you can navigate the requirements of workers’ compensation and retirement successfully.

Citations: 

Colorado Workers’ Compensation Claim Handling Guidelines. (2018).

Hotfelder, A. (2023). Workplace Injury Lawsuits: When You Can Sue Outside of Workers’ Compensation.

Kagan, J. (2021). Unemployment Compensation: Definition, Requirements, and Example

The Colorado Workers’ Compensation Claim Process. (2023).

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