The social security disability offset: a comprehensive review of statutory and case law guiding reduction in Florida workers' compensation benefits.

• Author: Gonzalez, Rafael
• Position: Florida

Workers' compensation cases often overlap with social security disability (SSD) cases. It is not uncommon to find an older worker, with a limited education and unskilled work experience, who has suffered a severe work injury which prevents him or her from returning to a past relevant work or other substantial gainful employment, who may be receiving state workers' compensation benefits and federal SSD benefits at the same time. In situations where both workers' compensation benefits and SSD benefits are involved, the practitioner handling either one or both matters needs a working understanding of how each of these systems affect the other. This requires a functional knowledge of both federal social security regulations and state workers' compensation law, specifically as it pertains to any offsetting or reduction of either benefit. This article will provide the workers' compensation/social security practitioner with a practical approach to the workers' compensation/social security disability offset from the Florida perspective.

Federal Statutory Authority

If for any month prior to the month in which an individual attains the age of 65, such individual is entitled to SSD benefits, and such individual is entitled for such month to periodic benefits on account of his or her total or partial disability (whether or not permanent) under a workers' compensation law or plan of the U.S. or a state, then the total of his or her benefits for such month shall be reduced (but not below zero) by the amount by the sum which exceeds the higher of 80 percent of his or her average current earnings, or the total of such individual's disability insurance benefits for such month. (1)

The reduction of benefits required shall not be made if the law or plan under which a periodic workers' compensation benefit is payable provides for the reduction thereof when anyone is entitled to SSD benefits on the basis of the wages and self-employment income of an individual as of February 18, 1981. (2) The reduction of a benefit otherwise required is not made if the workers' compensation law or plan under which the periodic benefit is payable provides for the reduction of such periodic benefit when anyone is entitled to disability insurance benefits. (3)

Florida Statutory Authority

Weekly workers' compensation benefits payable for disability resulting from injuries to an employee who becomes eligible for SSD benefits shall be reduced to an amount whereby the sum of such compensation benefits and such total benefits otherwise payable for such period to the employee and his or her dependents, had such employee not been entitled to workers' compensation benefits, does not exceed 80 percent of the employee's average weekly wage. However, this provision shall not operate to reduce an injured worker's benefits to a greater extent than such benefits would have otherwise been reduced under 42 USC [section] 424(a). This reduction of compensation benefits is not applicable to any compensation benefits payable for any week subsequent to the week in which the injured worker reaches the age of 62 years.

If the provisions of 42 USC [section] 424(a) are amended to provide for a reduction or increase of the percentage of average current earnings that the sum of workers' compensation benefits and SSD benefits can equal, the amount of the reduction of benefits shall be reduced or increased accordingly. No workers' compensation benefits payable for any week shall be reduced until the Social Security Administration (SSA) determines the amount otherwise payable to the employee and the employee has begun receiving such social security benefit payments. (4)

State Case Law

The offset provisions of [section] 440.15(9) (now [section] 440.15(10)) are self-executing in nature. (5) The offset may be taken administratively by the employer/ carrier once it is determined that the claimant is receiving social security benefits. (6) This is determined by submitting a signed DWC-14 form to a local SSA office. The completed DWC-14 will be returned by the same office noting the type and amount of benefits being received. (7)

Ultimately, the employer/carrier has the burden of proving that it is entitled to the offset against social security benefits. (8) The offset will not be permitted in the absence of evidence that it is warranted. (9) The employer/carrier has the continuing right and responsibility to compute and correct the social security offset. (10) An employer/carrier can take an offset when the employee is receiving temporary total disability (TTD), temporary partial disability (TPD,) or permanent total disability (PTD) benefits. (11) In University Medical Center v. Sumpter, 591 So. 2d 288 (Fla. 1st DCA 1991), the court stated that when F.S. [section] 440.15(3)(b)(1) was amended, changing wage loss benefits from monthly to weekly, the employer/carrier's right to a social security offset against wage loss benefits paid to an injured employee was created for the first time.

For many years, the court indicated that the offset could not be taken retroactively; ruling that it could only be taken prospectively once the employer/carrier determined that the claimant was receiving social security benefits. (12) However, in Brown v. L.P. Sanitation, 689 So. 2d 332 (Fla. 1st DCA 1997), the court ruled that the carrier may recoup benefits overpaid pursuant to a statutory provision effective January 1, 1994. Thus, for any benefit paid after January 1, 1994, the recoupment of any overpaid benefits can extend retroactively to January 1, 1994, even if the accident occurred prior to that time. The carrier may recoup up to 20 percent of the claimant's biweekly benefits pursuant to F.S. [section] 440.15(13).

It should be noted, however, that when the claimant promptly complies with employer/carrier's request for information on his or her receipt of SSD benefits and employer/carrier waits to file a response or assert an offset, the employer/carrier is not entitled to offset benefits retroactively, but only as of date the response is filed or the offset is actually asserted. (13) When the offset pertains to Grice benefits, or collateral sources, as in Orange County Fire Rescue v. Antonelli, 794 So. 2d 758 (Fla. 1st DCA 2001), the...