How FERS Disability Retirement Works

The Federal Employees Retirement System (FERS) provides retirement and disability benefits to eligible workers. If you become disabled, you may qualify for FERS disability retirement payments, which differ from regular retirement benefits. Eligibility for federal disability retirement benefits depends on specific requirements. The amount you receive varies based on age, service length, earnings and whether you receive Social Security disability benefits.

A financial advisor can give invaluable guidance as you sort through your options for retirement.

How Federal Disability Retirement Benefits Work

The Federal Employees Retirement System covers eligible federal workers and U.S. Postal Service employees. This program offers several retirement benefit options, including:

Disability retirement
Early retirement
Voluntary retirement
Deferred retirement

Disability retirement benefits support federal and postal employees who can no longer work due to a disability. Specifically, the federal Office of Personnel Management (OPM) states that employees should consider applying for disability retirement “only after you have provided your employing agency with complete documentation of your medical condition and your agency has exhausted all reasonable attempts to retain you in a productive capacity, through accommodation or reassignment.”

Eligibility for Federal Disability Retirement Benefits

The OPM sets clear guidelines on who can qualify for FERS disability retirement benefits. To qualify, you must meet all of the following conditions:

Federal service requirement: You must have worked as a federal civilian employee for at least 18 months under the FERS.
Disability requirement: Your disability must have occurred while working in a FERS-covered position and prevent you from performing your job duties.
Duration of disability: The condition must be expected to last for a minimum of one year.
Agency certification: Your agency must confirm that it cannot adjust your current position to accommodate your disability and that it has reviewed your qualifications for other vacant positions at the same grade or pay level within your geographic area.
Application deadline: You, a legal guardian or another authorized person must submit a FERS disability retirement application before leaving federal service or within one year after separation, unless you were mentally incapacitated at the time of separation or within the following year.
Social Security disability application: You must apply for Social Security Disability Insurance (SSDI). While approval is not required, withdrawing your SSDI application will cause OPM to dismiss your FERS disability retirement application automatically.

What Conditions Qualify for Federal Disability Retirement?

Federal disability retirement benefits under FERS cover a wide range of physical and mental conditions that prevent an employee from performing their job duties. To qualify, the disability does not need to be job-related, but it must be severe enough to make continued employment in the current position impossible.

Common qualifying conditions include chronic illnesses (such as cancer or autoimmune diseases), neurological disorders (including multiple sclerosis or Parkinson’s disease), and mental health conditions (such as major depression, bipolar disorder, or PTSD). Musculoskeletal impairments, like degenerative disc disease or severe arthritis, may also qualify if they significantly limit mobility or function.

The disability must be expected to last at least one year, and the agency must confirm that no reasonable accommodations are possible. Each case is reviewed individually, and medical documentation is essential in proving eligibility.

How Are FERS Disability Retirement Benefits Calculated?

Under the regular federal retirement benefit system, the basic annuity formula is based on age at retirement and years of service. If you retire under age 62 or at age 62 or older with less than 20 years of service, benefits are based on 1% of your high-3 average salary for each year of service.

High-3 is the average salary from your three highest-earning consecutive years. Typically, these are the final years of service but it can be any three consecutive years in which you had the highest earnings.

If you retire at 62 or older with more than 20 years of service, benefits equal 1.1% of your high-3 average salary per year of service. However, the amount you can receive in federal disability retirement benefits can depend on your age and the years of service you have when you retire.

Here are some examples of how FERS disability benefits can be calculated.

Scenario #1

You’re age 62 or older at retirement and meet age and service requirements for voluntary retirement.

If you are at least 62 years old and have fewer than 20 years of service, your pension is calculated at 1% of your high-3 average salary per year of service.
If you are 62 or older with 20 or more years of service, your pension is based on 1.1% of your high-3 average salary for each year worked.

Scenario #2

You’re under age 62 at retirement and not eligible for immediate voluntary retirement.

For the first 12 months, benefits are calculated at 60% of your high-3 average salary reduced by your full Social Security benefit for any month in which you’re entitled to receive those benefits.

After the first 12 months, benefits are calculated at 40% of your high-3 average salary reduced by 60% of your Social Security benefit for any month in which you’re entitled to receive Social Security disability benefits.

Note that you’re entitled to your earned annuity in both cases if it’s higher than the amount you’d get using the 60% or 40% formulas. At 62, your benefit is recalculated as if you had worked until the day before your 62nd birthday and then retired.

How to Apply for FERS Disability Retirement

If you meet the eligibility requirements, the next step is to apply. There are two forms you need to complete:

SF 3107, Application for Immediate Retirement
SF 3112, Documentation in Support of Disability Retirement

If you’re under age 62 you also have to submit documentation showing that you’ve applied for Social Security disability benefits after leaving your job.

These forms can be complex, but your employer may help. If more than 31 days have passed since separation, your former employer may not assist if they no longer have access to your records. If it’s been more than 31 days since separating from service, then your former employer may not be able to help if they no longer have access to your personnel records. In that case, you’d need to forward all the appropriate paperwork to the OPM yourself.

What Medical Documentation Do You Need to Qualify?

You’re also responsible for providing any supporting documentation that may be required. This can include medical records or other records showing that you received treatment for a disability.

Your physician must complete SF 3112B, which outlines the nature of your disability, its expected duration, and how it prevents you from performing your current job duties. The statement must include:

Clinical diagnosis with supporting test results, imaging, or lab reports.
Functional limitations, explaining how the condition restricts movement, cognition, or other work-related abilities.
Treatment history and prognosis, including medical interventions, medications, or therapies attempted.
Statement on work capacity, clarifying why your condition cannot be accommodated in your current role.

OPM prioritizes objective medical documentation and vague claims may cause delays or denials. A physician’s statement should link the medical condition to job duties, explaining why continued employment is not possible.

Keeping Your FERS Disability Retirement Benefits

If there’s a change in your disability status that could affect your ability to continue receiving federal disability retirement benefits. OPM may require periodic medical updates to verify that your condition remains unchanged. You must cover medical exam costs, and failing to complete one could result in suspended benefits.

If you’re under age 60, FERS disability retirement benefits are automatically terminated if:

You’re determined to be fully recovered from a disability
Your income from wages and self-employment is at least 80% of the current rate of basic pay from the position you retired from
You become re-employed in federal service in a position that’s equivalent to the one you retired from

You can, however, get your benefits back if your disability resumes or you no longer exceed the 80% cap on earnings.

Bottom Line

A woman with one artificial leg at the library

The Federal Employees Retirement System is designed to help federal and Postal Service workers enjoy a comfortable retirement. That includes being able to retire early if a disability keeps you from working. Applying for FERS disability retirement benefits requires timely action, so complete your application as soon as possible after becoming disabled. The amount you receive varies with your age, length of service, earnings and whether you also get Social Security disability benefits.

Tips for Retirement Planning

Consider talking to a financial advisor about the best ways to make the most of the federal retirement benefits you may be eligible for. If you don’t have a financial advisor yet, finding one doesn’t have to be complicated. SmartAsset’s free tool matches you with financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
One key to successful retirement planning is knowing what your Social Security payments will be. SmartAsset’s Social Security calculator can quickly give you an estimate of what your monthly payments could be based on when you plan to claim them.