The following types of cases may require manual proration of the lump sum (LS) award:

• •

  Dual entitlement cases;

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  Combined family maximum (CMAX) cases;

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  Pre-1978 cases;

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  Cases that involve more than four WC claims; or

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  Cases the ICF program cannot process correctly. For WC/PDB ICF processing and limitations, see DI 52165.020.

If a LS award cannot be prorated through ICF or MCS:

1. 1. 

   Manually prorate the LS on the back of a Form SSA-2455 (Offset Worksheet – Disability Insurance Benefits).

2. 2. 

   Verify all of the following information:

   1. a 

      Gross amount of the LS.

   2. b 

      Start date.

   3. c 

      Weekly rate at which to prorate.

   4. d 

      Excludable expenses.

If a periodic WC/PDB benefit paid through the day before the LS award had the same weekly rate as that determined for the LS, there will be no mid-month adjustment; otherwise, you must compute a mid-month adjustment for the start date month. See DI 52150.040 – Changes in Workers’ Compensation/Public Disability Benefits (WC/PDB) Paid.

Step 1: Divide the gross amount of the LS by the weekly rate. The quotient will be the number of weeks the proration will last. There is usually a decimal remainder. Do not round, just drop the decimal remainder and multiply the integer (number of whole weeks) by the weekly rate. Subtract the result from the gross amount of the LS. The result is the LS remainder.

Step 2: Divide the whole number of weeks by 52. The quotient will be the number of years the proration will last. The remainder will represent additional weeks.

Apply the following rules to count years:

• •

  Drop 2 days for the first year. If the first year is a leap year and the beginning date is prior to February 29, drop 3 days.

• •

  Drop 1 day for each succeeding year. If the year is a leap year and you pass February 28, drop 2 days.

EXAMPLE:

After you determine the ending date for the full years of proration, add the number of weeks for any partial year remaining. The result will be the lump sum ending date.

Step 3: Determine the LS end date by counting these years and weeks beginning with the start date. NOTE: Begin counting with the start date – not the day after.

Step 4: Add the LS remainder from step 2 to the amount of WC computed for the last month of the proration. If the partial monthly payment is higher than the previously determined monthly WC/PDB rate, use the previously determined rate and carry the excess over to the following month.

Step 1: Compute the number of weeks of proration and the LS remainder.

Step 2: Determine ending date of proration

Step 3: Compute the WC amount for the last month of proration (August 2009) including the LS remainder.

Since $560.70 is less than the monthly proration rate of $1,191.90, there is no need to carry the proration into September 2009.

There are three methods of proration for a LS with expenses. Unless the award specifically states how the expenses are to be deducted from the gross, use the method that is most advantageous to the entire family.

Each method has distinct advantages and disadvantages depending on the situation. Therefore, judgment is needed in determining the most advantageous method. The most advantageous method is not necessarily the one that pays the most benefits. When making the determination, disregard protected increases since those are common to all three methods, but be sure to consider the following questions:

• •

  Is the worker nearing age 62 (RIB) or 65 (WC Offset Termination) prior to December 19, 2015; or full retirement age (FRA)? NOTE: Effective December 19, 2015 or later, WC offset termination now extends from age 65 to FRA. See 2015 Amendment in DI 52101.005.

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  Does the worker have a terminal illness?

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  Was the worker awarded a closed period of DIB?

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  Is delayed imposition of reverse offset involved (i.e., Florida)?

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  Are you imposing offset retroactively? (possible overpayment involved)?

• •

  Would a triennial redetermination adjust or remove offset?

• •

  Is the ACE or the TFB the applicable limit?

• •

  Is there any other circumstance in this case affecting the determination?

While there are certain situations where one method is usually more advantageous than the others, all three methods must be evaluated for every case.

For the following example the same lump sum will be prorated using each of the three methods. Here are the details of the lump sum settlement:

Gross Lump Sum $49,000

Excludable Attorney Fees: $5,000.00

Excludable Future Medical Expenses: $4500.00

Lump Sum Start Date: March 17, 2006.

Prior Periodic Payment Rate: $275.00/wk (1191.90 monthly)

No proration rate is specified in the award.

DI 52101.005 — Social Security Amendments with Workers’ Compensation/Public Disability Benefits (WC/PDB) Offset Provision

DI 52150.040 — Changes in Workers’ Compensation/Public Disability Benefits (WC/PDB) Paid

DI 52165.020 — Use Interactive Computation Facility (ICF) Function 34 Online Record Entry (OREO) to Process ICF Problems and Limitations