Receiving Workers’ Compensation and Collateral Benefits
The laws regarding the receipt of other, collateral benefits while receiving Workers’ Compensation benefits are very complicated, and can often be daunting to an injured worker in Pennsylvania. Many of our clients ask whether they can receive other benefits while receiving Workers’ Compensation benefits, and the short answer is yes, however, there a number of rules governing the receipt of these benefits. First, the injured worker should understand that there is an obligation to inform the workers’ compensation carrier of the receipt of any such benefits, including unemployment compensation, severance, Social Security Retirement Benefits, and pension benefits. This article will attempt to give an overview of the rules governing these benefits, but is certainly not a comprehensive guide, and consultation with an experienced workers’ compensation attorney in these cases is highly recommended.
When receiving workers’ compensation, an injured worker can also apply, and receive Social Security Disability (“SSD”) benefits. If SSD benefits are received the SSD will be offset by the amount of workers’ compensation benefits received on a one to one basis, according to a formula set up by the Social Security regulations. The general rule is that the combined benefits between Social Security and workers’ compensation cannot exceed 80% of a person’s former monthly income. The receipt of workers’ compensation benefits and SSD benefits has significant tax implications, and is especially complicated after a workers’ compensation case is settled. This area is a pitfall for the unwary, and these matters should always be reviewed by a workers’ comp lawyer.
Social Security Retirement benefits (often called old age benefits or “SSR”) can also be received while receiving workers’ compensation benefits. However, a few issues arise in the context of workers’ compensation. First, if a person applies for SSR the workers’ compensation carrier may infer that the injured worker is voluntarily removing himself from the work force, which can prompt an attempt by the carrier to try to suspend the claimant’s workers’ comp benefits; however, if the injured worker applies for SSR because of the injury the insurance carrier’s argument will probably not hold up. Second, the workers’ compensation carrier will be entitled to a 50% offset for SSR benefits. Thus, if the claimant’s SSR benefits are $1,000.00 per month, the carrier would be able to offset the workers’ compensation benefits by $500.00. Finally, if the SSR benefits are received before the date of injury, no offset is available to the compensation carrier, and the injured person can receive both benefits simultaneously.
Some benefits available to injured workers are not necessarily available to be received at the same time (without an offset), but can be received while the injured worker attempts to obtain workers’ compensation benefits. For example, an injured worker may receive unemployment benefits during litigation of a contested workers’ compensation claim; however, if she ultimately receives workers’ compensation benefits, the workers’ compensation carrier would be entitled to a credit for any unemployment benefits received. The same analysis applies for both short- or long-term disability benefits received while waiting to get workers’ compensation benefits. These credits or offsets must be specifically agreed to by the compensation carrier and the claimant, and if they are not asserted at the time of the litigation of the compensation claim, they may be waived.
Pension benefits may be available to someone receiving workers’ compensation benefits, but the compensation carrier will be entitled to receive an credit for pension benefits received to the extent that the pension plan was funded by the employer. Thus, if the employer funded 50% of the pension benefits available to the injured worker, it will be entitled to a credit for 50% of the amount received under the pension plan. The burden of proving the entitlement to the pension benefit offset or credit is on the employer. Thus, the employer must present evidence showing the amount it actually contributed to the plan. This is especially difficult to prove in defined benefit plans, and multi-employer plans. A workers’ compensation carrier may also receive a credit for severance benefits received by the injured worker receiving workers’ compensation benefits. The offset due to the workers’ compensation carrier is for the net amount of benefits received, and not the gross.
For all of these offsets and/or credits the injured worker must be given proper notice, which must usually be given within 20 days prior to taking the credit. To that end, employers and workers’ compensation carriers should beware that these credits must be affirmatively asserted with the proper notice, or presented at the time of a hearing for the injured worker, otherwise they may be deemed waived. The rules and case law governing offsets and credits are extensive, and complicated. Any injured worker, employer, or insurance carrier would be well-advised to consult experienced legal counsel before attempting to either take a credit, or apply for other benefits in addition to workers’ compensation benefits.
Our attorneys at Wolf, Baldwin & Associates, P.C. are able to answer your questions regarding Pennsylvania’s Workers’ Compensation, and collateral benefits. Our lawyers are experienced in workers’ compensation cases, representing both employees. Please click here to contact us.