BENEFITS PAID TO DISABLED WORKERS UNDER THE DISABILITY INSURANCE PROGRAM AND BY STATE WORKERS' COMPENSATION PROGRAMS CAN OVERLAP AND CAUSE WORKERS TO RECEIVE MORE IN BENEFITS THAN THEY WERE EARNING BEFORE BECOMING DISABLED. TO CORRECT THIS SITUATION, IN 1965, THE CONGRESS ADDED THE WORKERS' OFFSET PROVISION TO THE SOCIAL SECURITY ACT, WHICH LIMITS THE COMBINED PAYMENTS TO 80 PERCENT OF A DISABLED WORKER'S WAGES AT THE TIME OF INJURY AND PROVIDES DISABLED WORKERS WITH A FINANCIAL INCENTIVE TO RETURN TO WORK. EITHER THE SOCIAL SECURITY ADMINISTRATION (SSA) OR A STATE CAN REDUCE (OFFSET) ITS BENEFITS UNDER THE PROVISION. THE OFFSETTING PROVISION HAS CAUSED SOME INEQUITIES IN BENEFITS TO DISABLED WORKERS. BECAUSE IT DOES NOT REQUIRE STATES TO FOLLOW THE 80 PERCENT LIMIT IN OFFSETTING WORKERS' COMPENSATION BENEFITS, WORKERS IN STATES WHICH TAKE ADVANTAGE OF THE PROVISION MAY RECEIVE MORE IN COMBINED BENEFITS THAN THEY WOULD HAVE RECEIVED IF SSA HAD MADE THE OFFSET. ALSO, SSA BEGINS OFFSETTING DISABILITY INSURANCE PAYMENTS IN THE MONTH AFTER IT IS NOTIFIED THAT A DISABLED WORKER IS RECEIVING WORKERS' COMPENSATION, NOT WHEN A WORKER ACTUALLY BEGAN RECEIVING THE COMPENSATION. AS A RESULT, DISABLED WORKERS WHO DO NOT REPORT COMPENSATION BENEFITS TO SSA OR WHO REPORT THEM LATE ARE FINANCIALLY REWARDED. CONGRESS SHOULD REVOKE SECTION 224(D) OF THE RELEVANT STATUTE, WHICH ALLOWS STATES TO OFFSET THEIR PORTION OF DISABILITY BENEFITS, AND SHOULD REQUIRE THAT THE SSA OFFSET BE EFFECTIVE AT THE TIME WORKERS' COMPENSATION BENEFITS WERE AWARDED. (AUTHOR ABSTRACT MODIFIED--RCB)