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If you become ill or injured while you are an active state of Michigan employee, and you can no longer work, your retirement plan provides protection for you and your dependents. Disability protection is provided under Public Act 240 of 1943, as amended. Benefits are administered by the Office of Retirement Services (ORS), a division of Michigan's Department of Technology, Management and Budget.
To qualify for a disability retirement, you must meet all of the following conditions:
- You file an application with ORS within one year of the date of your termination from state employment. This filing deadline can be extended an additional 12 months if ORS determines that you have shown good cause for not filing within one year. If more than 12 but less than 24 months have passed since your termination and you believe you have good cause, substantiation for late filing must accompany your application.
- An independent medical advisor certifies that you were totally and probably permanently disabled at the time you last worked for the State of Michigan. Totally disabled means you are unable to perform the duties of your current position. Permanently disabled means the disability is likely to last your lifetime.
- You must be vested to be eligible for a nonduty disability (an injury or illness incurred outside of work). In most cases, you are vested when you have the equivalent of 10 years of full-time state of Michigan service.
If you have a duty disability (an illness or injury incurred from duties at work), you do not have to be vested to be eligible. A benefit could be payable regardless of how long you have been employed by the state.
Are You Eligible?
If you answer "yes" to all of the requirements listed in the checklist below, you may be eligible for a disability retirement. You should read the entire contents of the Disability Protection section to fully understand your rights and options. If you answer "no" to any of the requirements, you are not eligible for a disability retirement.
How Pensions Are Calculated
Nonduty disability pension calculations.
A nonduty disability retirement benefit is calculated the same as a regular service retirement. The formula multiples your years of service times 1.5 percent times your final average compensation to figure your annual pension amount.
When you apply, you can choose the straight life option, which pays you the most money but does not provide any ongoing benefits to a beneficiary when you die. Or you can elect a survivor option, which pays you less but continues pension and health insurance benefits to your beneficiary upon your death. For more information about your retirement options, see the Payment Options section.
Duty disability pension calculations.
When you reach age 60, your duty disability pension is recalculated as a regular service retirement, adding the years you received a duty disability pension to your credited years of service in the pension formula used earlier. If your new years of service total does not equal at least 10 years, we'll use 10 years of service to calculate your new pension amount. If the recalculated pension amount is less than $6,000 per year, your annual pension amount will default to $6,000 ($500 monthly). The new calculation cannot be more than the amount that, when added to your workers' compensation benefit, exceeded your final earnings with the state of Michigan.
The Application Process
File an application.
Your application for disability retirement must be received within one year from the date of your termination from state employment. (Again, you may get a 12-month extension if you are able to show good cause.) Any application for disability retirement, regardless of when it is filed, must be for a condition you incurred before your termination from state employment.
Your first step to apply for a disability pension is to contact ORS and request a disability retirement packet. Along with an application form, the packet contains a medical questionnaire and detailed information about insurances and pension options. You must sign the medical release forms that allow an independent medical advisor to obtain and review the medical records pertaining to the injury or illness that you believe prevents you from working. Once completed, you must send the forms to Disability Determination Services (DDS).
The disability determination.
DDS is part of Michigan's Department of Health and Human Services. DDS assists ORS in the disability application process by collecting and validating forms, obtaining and reviewing medical documentation, and providing expertise in determining medical eligibility.
DDS will ask the medical providers listed on your application to send your medical records directly to DDS for review. An independent medical advisor from DDS will review your medical records and, if necessary, schedule an exam for you with a medical professional.
If your application is approved.
If DDS determines your medical condition meets the disability criteria, ORS will notify you of the approval. We will then process your application and insurance enrollments and you will receive your first pension payment four to six weeks after all required information is received. Your first check will include any past due benefits as well.
If your disability retirement is approved and you have not yet terminated your employment with the state, contact your human resource office immediately so your benefits are not delayed. If you do not terminate employment within 30 days of ORS' approval notification, you may have to reapply.
If your application is denied.
If DDS determines that your condition does not meet the medical requirements for a disability pension as defined in the retirement act, you will receive a denial letter. This letter will advise you of your appeal rights and the deadline for filing an appeal.
What to Expect as a Disability Retiree
Your pension payments.
Before your payments begin, we'll send you an award letter that tells you the amount of your pension payment and when you can expect your first check. Pensions are paid on the 25th of each month.
The award letter will include a booklet that tells you more about things like benefit statements, postretirement increases, insurance enrollments, and taxes. It will also tell you when and how to get in touch with ORS after your pension payments begin.
As a disability retiree, every year until age 59 you will receive an Annual Disability Certification (R0089CG) form that you must complete and return to ORS. This form verifies that you are still unable to work because of a disabling condition.
If you return to work.
Because of the nature of a disability pension, you must gain approval from ORS before you return to work for any employer. Write a letter to ORS before you resume working. The letter should include a job description and complete information regarding the type of work you'll be doing, the hours you're expected to work, and the name of your potential employer. Failure to gain advanced approval may result in suspension of your disability pension.
If you return to work for the state, either directly or indirectly, your pension will be suspended. You will remain eligible for the health, dental, and vision insurances with premium subsidies. Please notify ORS in writing if you return to work for the state; we will arrange for premium billings when you report your employment. Click here for more complete details on retirees returning to work for the state.
If you return to work outside of state employment, there is a limit on how much you can earn without affecting your pension. As a disability retiree you can earn up to the difference between your final compensation and your annual pension without your pension being reduced. If you earn more than the limit, you will have to repay the excess amount up to your full pension amount to the retirement system.
We're Here to Help
We hope that this information has helped you understand the disability application process. We realize you have a lot of important decisions to make regarding your future. Please don't hesitate to contact us if you have any questions regarding disability or retirement benefits.
Check out the Employee Benefits Division for other benefit information; Voya Financial® for deferred compensation information; and the Webinars and Seminars page to learn about Preretirement Orientation seminars.
Be sure to ask your human resource office about other programs you may be eligible for such as social security disability benefits, workers' compensation, long-term disability insurance, and more.
Our online benefit estimator in miAccount can help you estimate the monthly pension you might receive if your disability application is approved.