I have previously posted on the workers compensation offset in social security disability cases. This offset applies to wage loss benefits.
The question then arises, does the offset apply to permanent impairment benefits? Workers compensation schemes, which are governed by state laws, typically provide benefits for permanent impairment, in addition to wage loss benefits and medical benefits. These permanent impairment benefits are often expressed in terms of a percentage of whole body impairment. A certain percentage impairment entitled an injured worker to a certain number of weeks of cash benefits. These permanent impairment benefits operate according to a schedule principle, where permanent injuries to different body parts equate to a certain percentage of whole body impairment, resulting in a certain number of weeks of compensation. There is typically a conclusive presumption that, sooner or later, the permanent impairment will result in a loss of earning capacity, regardless of when that may occur.
In the case of Davidson v. Sullivan, 952 F.2d 90 (1st Cir. 1991), the First Circuit Court of Appeals held that such permanent impairment benefits are subject to the workers compensation offset in social security disability cases.
The offset provides that combined workers compensation and social security disability benefits cannot exceed 80% of the person’s predisability income. The purpose of the offset is to avoid duplication of benefits.
In the aforementioned case, the plaintiff Mr. Davidson’s permanent partial disability lump sum settlement was held to be subject to the offset, although payments for medical expenses and attorney fees were held not to be subject to the offset, as they are not in the nature of wage or income loss benefits.
This case is described and incorporated by reference into Social Security Ruling (SSR) 92-6c.
If you have any questions about the interaction between workers compensation and social security disability or SSI benefits, it may be helpful to contact an experienced attorney.
This material should not be construed as legal advice for any particular fact situation, but is intended for general informational purposes only. For advice specific to any individual situation, an experienced attorney should be contacted.