Disability Benefits for
Special Service Members
Protection Against the Unexpected |
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Comparing Disability Benefit Options
If you are eligible for Special Service disability benefits and regular disability benefits, the information in this section is designed to help you evaluate your options and choose the type of disability benefit that is right for you. Special Service representatives are also available to answer your questions and help you make an informed choice based on your personal situation.
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Regular
Disability Benefits |
Special Service
Disability Benefits |
| Provides benefits for a work-related disability |
Yes |
Yes |
| Provides benefits for a non-work-related disability |
Yes |
Yes |
| Eligibility |
Stop working in IPERS-covered employment Be vested
Indicate on your application for benefits that you are retiring due to a disability
Be receiving social security or railroad retirement disability benefits |
Stop working in IPERS-covered employment
Be vested
Apply for benefits within 1 year after terminating IPERS-covered employment
Complete a medical exam by the Medical Board of the University of Iowa (this requirement can be waived by IPERS) |
| Taxability of benefits |
Taxable |
Ordinary Special Service disability benefits are taxable In-service Special Service disability benefits are usually nontaxable unless you choose benefit payment Option 2 (annuity with variable decreasing lump sum) |
| Retroactive payments |
Up to 36 months |
Up to 6 months |
| Benefit offset (reduction) for receipt of other disability-related payments |
No |
Yes |
Taxability
Special Service disability benefits and regular disability benefits are taxed differently. Special Service disability benefits are nontaxable, provided that:
- You have been awarded in-service disability benefits
- You do not choose benefit payment Option 2 (annuity with variable decreasing lump sum)
Members with a substantial amount of service credit may find that the regular retirement or regular disability benefits, although taxable, provide the larger net amount. Death benefits payable to your beneficiary(ies) will receive the same tax treatment as the benefits you were receiving.
Retroactive Payments
Members who retire with Special Service disability benefits may qualify for up to 6 months of retroactive benefits. However, members who retire with regular disability benefits may qualify for up to 36 months of retroactive disability benefits.
Benefit Offsets
Special Service disability benefits are subject to an offset, or reduction, for other disability-related payments you are receiving for the same disability. See the Benefit Offsets paragraph in the "Special Service Disability Benefits" topic for more information. Regular disability benefits are not subject to offsets.
Converting Special Service Disability Benefits to Regular Disability Benefits
If you retire with Special Service disability benefits and later qualify for social security or railroad retirement disability benefits, you have 60 days to convert your Special Service disability benefits to regular disability benefits. Since you cannot switch back to Special Service disability benefits at a later date, make sure switching to regular disability benefits is the right choice for you before submitting an application to switch benefits. A member who retires under regular disability benefits does not have the ability to switch to Special Service disability benefits. See the "Switching Benefits" topic for more information.
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