TN 1 (11-09)
DI 52105.001 Reverse Offset Plans
Some States have plans that reduce workers’ compensation (WC) or public disability benefits (PDB) when the disabled worker is also receiving Social Security disability insurance benefits (DIB). This is known as reverse offset or reverse jurisdiction (RJ). If SSA recognizes the reverse offset or RJ plan, the DIB benefits are not offset. Generally, SSA recognizes only reverse offset plans in effect on or before February 18, 1981.
NOTE: The State of payment, not the State of residence, determines which WC reverse offset plan applies.
A. Recognized reverse offset plans
The 1981 Social Security Amendments define how SSA recognizes reverse offset plans. Determining whether to apply WC/PDB offset or accept the reverse offset plan depends on three factors:
1. DIB onset date March 1, 1981, or later and month of entitlement (MOET) September 1981 or later
Do not offset DIB if the WC/PDB is being paid under a reverse offset law or plan that was in effect on or before February 18, 1981. New reverse offset plans or expansions of prior plans put into effect after February 18, 1981, are not recognized as reverse offset plans and DIB benefits are still subject to WC/PDB offset. It is important to note that both the workers compensation law and the reverse offset plan for that specific type of WC must have been in effect on or before February 18, 1981, in order for the plan to be recognized by SSA.
NOTE: Refer to the charts in DI 52105.001B in this section before processing the case. State laws differ on which types of payments (i.e., permanent partial, temporary total, etc.) are subject to reverse offset and how long the reverse offset lasts.
2. DIB onset date prior to March 1, 1981, or MOET prior to September 1981
Do not offset DIB if the WC law or plan contains a reverse offset provision for the type of WC being received regardless of the effective date.
(For disabled workers meeting either the onset date or month of entitlement (MOET) criteria above, public disability benefits (PDBs) are never offset and all WC reverse offset plans are recognized by SSA.)
B. Approved reverse offset plans
It is important to follow the specific procedure for each plan. Each entity has its own WC/PDB rules and statutes. Refer to the Program Operations Manual System (POMS) section for the appropriate state or territory before processing the case.
1. States that reduce some or all types of WC payments
*NOTE: Nevada’s reverse offset plan was effective 07/01/1981. SSA does not recognize RJ plans after 02/18/1981
2. States with PDB reverse offset plans
3. Railroad PDB reverse offset provision
Railroad sickness pensions paid under the Railroad Unemployment Insurance Act (RUIA) are paid under a recognized plan. For more information, see Railroad Board (RRB) website: http://www.rrb.gov/general/handbook/chapter6.asp
C. Scope of recognized reverse offset plans
Reverse offset applies only to the WC/PDB paid under that State or entity’s plan or system. It does not apply to other sources of WC or other types of WC/PDB that a number holder (NH) might receive.
EXAMPLE: The State of Colorado has a reverse jurisdiction plan, but a Colorado resident who receives Federal WC under the Federal Employees Compensation Act (FECA) would not be receiving payments under Colorado’s reverse offset plan. Offset would still apply to the DIB benefits due to receipt of Federal WC payments.
D. Reverse offset waived
DIB benefits are paid in full whenever the WC/PDB benefit is paid under a recognized reverse offset plan even if the reduction is waived for that NH’s case. Do not offset.
E. Verifying the existence of reverse offset plans
Take the following actions to verify whether WC/PDB is paid under a recognized reverse offset plan:
Verify the type of WC/PDB being received if the State only reduces certain types of WC/PDB (e.g., temporary total, permanent partial, etc.). You do not need to verify that the reduction was actually applied.
EXCEPTION: If the worker alleges receipt of WC from Colorado or Wisconsin, or receipt of a railroad sickness pension, do not verify unless there is evidence that the source of the WC/PDB being received might not be the state with the reverse offset plan, e.g., the worker resides in Colorado and the injury occurred in Michigan.
Verify the amount of WC/PDB if offset applies for at least one month. Otherwise, the amount is irrelevant.
If reverse offset applies, code the month/day/year (MM/DD/YY) that reverse jurisdiction is effective on the appropriate Interactive Computation Facility – WC/PDB screens (ICF WC/PDB) or Modernized Claim System (MCS) screens for an initial award action. Input the Compensation Source in the Modernized Claims System (MCS) or the Type in the Interactive Computation Facility (ICF WC/PDB) as “WP” or the appropriate code.
For information on completing the ICF WC/PDB screens, see DI 52165.010.
For information on completing the MCS Common Screens, see DI 52155.001.
In Florida, New Jersey, and Washington, reverse jurisdiction ends at age 62. Set a diary for four months prior to age 62 to develop for any changes in the WC/PDB or the reverse offset. Be sure the diary will mature in the correct processing center (PC).
NOTE: If reverse offset, also known as reverse jurisdiction or "RJ", applies but was not considered, (i.e., offset was erroneously imposed), remove offset retroactively to the effective month of reverse offset, and code RJ accordingly.
F. Reverse offset plan enacted or expanded after February 18, 1981
1. DIB onset March 1, 1981, or later and MOET September 1981 or later
Offset DIB based on the full and unreduced WC/PDB benefit amount. Ignore the unrecognized reverse offset.
2. DIB onset date prior to March 1, 1981, or MOET prior to September 1981
Do not offset DIB.
Review the rules of the specific offset plan to determine how the reverse offset is applied.
Diary to impose offset once the reverse offset ends, unless it ends after age 62, in which case offset does not apply since offset ends at 62 for these cases.
G. Reverse offset no longer applies
1. Why reverse offset ends
Reverse offset ends for a variety of reasons:
WC/PDB entitlement ends;
WC is paid by Florida (see DI 52120.055), New Jersey (see DI 52120.165) or Washington State (see DI 52120.265) where reverse offset ends at age 62. (DIB is then subject to offset at age 62 if DIB onset is March 1, 1981, or later and DIB MOET is September 1981 or later; DIB is not subject to offset at age 62 if the DIB onset is prior to March 1, 1981, or the MOET is prior to September 1981. See DI 52170.040, Notice Provisions - Pre-1981 Amendment Cases.)
The type of WC/PDB changes (for example, reverse offset applies to North Dakota temporary total (TT) WC, but not to permanent partial (PP) WC, so if North Dakota WC payments change from TT to PP, reverse offset no longer applies).
For a list of States with approved WC/PDB reverse offset plans, see the WC list in DI 52105.001B.1. and the PDB list in DI 52105.001B.2.
2. How changes in reverse offset status affect WC/PDB offset computations
The following instructions for various reverse offset situations explain:
When benefit increases are protected from offset,
When to establish a new Offset First Considered (OFC) date,
When to compute a new Total Family Benefit (TFB), and
When a new average current earnings (ACE) may be necessary.
a. Offset First Considered (OFC) date precedes the beginning date of reverse offset
If the OFC date precedes the beginning date of reverse offset (also known as reverse jurisdiction, and “RJ”), and reverse offset subsequently ceases (for example, at age 62 attainment), and DIB is again offsettable based on the same WC/PDB injury/illness, all SSA benefit increases from the OFC date are protected from offset. This is true whether or not benefits are actually reduced prior to reverse offset (i.e., a high ACE or excludable expenses may preclude offset prior to the reverse offset effective month). The Interactive Computation Facility (ICF) has the capability to correctly compute offset in these situations.
Protect all increases due to:
Cost of living allowances (COLAs),
Primary insurance amount (PIA) recalculations or recomputations,
Combined family maximum (CFM) first applicable in a month after the OFC date. Benefit increases that result from the CFM are protected during the period the CFM applies.
The total family benefit (TFB) and average current earnings (ACE) are computed effective with the OFC date. (For more information on situations requiring a new TFB, see DI 52150.005D - DI 52150.005F. For more information on situations when the ACE can change, see DI 52150.010C.3.)
EXAMPLE: OFC date before reverse offset effective date: The claimant receives Florida WC where reverse offset begins the month of DIB adjudication. In June 2006, DIB benefits are awarded retroactive to April 2004. DIB is offset from April 2004 through May 2006 and reverse offset applies beginning June 2006 (the month of adjudication). The beneficiary reaches age 62 in January 2008, reverse offset no longer applies, and DIB is offset from age 62 up to full retirement age. The TFB is based on the offset first considered date (OFC) of April 2004, and the December COLA increases in 2004, 2005, 2006, 2007, and 2008 are protected from offset.
b. Offset First Considered (OFC) date and the beginning date of reverse offset are the same month
Benefit increases during the reverse offset period are not protected from offset when the OFC date and the beginning date of reverse offset are the same month.
If the OFC date and the beginning date of reverse offset are the same month, reverse offset subsequently ends, WC/PDB entitlement continues, and DIB is then subject to offset:
A new OFC date applies effective with the first month reverse offset no longer applies;
A new TFB (based on the monthly benefit amounts effective with the new OFC date) applies;
A new ACE may apply effective with the first month reverse offset no longer applies if the original ACE is a High-5 or average monthly wage (AMW) ACE and there are additional earnings after onset resulting in an ACE recomputation. (See DI 52150.010 Average Current Earnings (ACE).)
NOTE: See the Interactive Computation Facility (ICF) Resource Page here for correct ICF coding and workaround in these situations. Although the Resource Page example refers to situations when “Reverse Offset Ends at Age 62,” apply the same coding principles for situations when reverse offset ends for reasons other than age 62 attainment.
EXAMPLE: Changes to OFC date and TFB when OFC date equals reverse offset effective date, reverse offset ends, WC continues and DIB is offset: A claimant receiving New Jersey permanent total (PT) WC is awarded DIB with a month of entitlement of June 2002. A High-1 ACE is involved. Even though reverse offset applies effective with the DIB MOET, the Master Beneficiary Record (MBR) coding requires an OFC date and TFB, so an OFC date of June 2002 and a TFB based on the monthly benefit amount in June 2002 are coded. The claimant attains age 62 in January 2008, reverse offset no longer applies, WC benefits continue, and DIB is offset effective January 2008 requiring a “new” OFC date of January 2008 and a “new” TFB based on the monthly benefit amount for January 2008. The ACE remains the same. MBR coding reflects the 2008 OFC date and TFB. The increases from June 2002 through December 2007 are not protected.
c. Multiple WC/PDB awards result in multiple periods of reverse offset
There are situations when WC/PDB entitlement terminates during the reverse offset period and a new WC/PDB claim is awarded which is also paid under a reverse offset plan, and there is at least one month of non-entitlement to WC/PDB between the two awards. The period of non-entitlement to WC/PDB closes out one period of offset and any subsequent WC/PDB award establishes an entire new period of offset, thereby requiring a new offset first considered (OFC) date and a new TFB effective with the new WC/PDB award. A new ACE may also be required if the previous ACE is not a High-1 ACE based on earnings in the year of disability onset and the five years immediately preceding the year of onset. See DI 52150.010C.3. for situations when the ACE can change.
If the new OFC date precedes the new beginning date of reverse offset, increases are protected, as described in DI 52105.001G.2.a.
If the new OFC date and the new beginning date of reverse offset are the same month, follow procedures in DI 52105.001G.2.b. regarding protected increases.
NOTE: If a CFM in effect during the previous reverse offset period still applies when the subsequent reverse offset period (based on the new WC/PDB award) begins, the new TFB will include the CFM auxiliary rates in effect with the new OFC date. If the CFM ceases, the TFB must be refigured.
EXAMPLE - Multiple WC awards result in multiple periods of reverse offset: A worker receives permanent total WC from the state of Florida and is subsequently awarded DIB effective April 2002. The DIB claim is adjudicated timely and reverse offset applies beginning April 2002. A High 1 ACE applies. Although reverse offset is effective with the DIB MOET and benefits are not reduced, MBR coding requires an OFC date and TFB. The OFC date is equal to the DIB MOET and the TFB is based on the monthly benefit amount effective in the DIB MOET.
In August 2005, WC terminates because the claimant has gone back to work and a WC termination (STOP) date is coded on the MBR.
In October 2005, the claimant sustains another on-the-job injury and receives a new WC award effective with the date of injury. Reverse offset again applies (effective October 2005). Although DIB is not offset, a new OFC date of October 2005 and a new TFB based on the October 2005 monthly benefit amount are established. The High-1 ACE remains the same. The claimant attains age 62 in May 2007, WC payments continue, and reverse offset terminates at age 62 attainment. Offset is imposed effective May 2007. The SSA COLA increases from April 2002 through April 2007 and a January 2006 PIA recomputation are not protected. Any SSA benefit increases from May 2007 are protected from offset.
3. Triennial redeterminations (redets) of the ACE not applicable
Triennial redets are not computed during the period of reverse offset because the reverse offset period represents a break in offset. However, if WC/PDB offset is continuous after reverse offset ends, a triennial redetermination of the ACE may apply in January of the third calendar year following the year reverse offset ends. (A redet ACE applies if it results in higher benefits payable after offset.)
For more information on the redet ACE, see DI 52150.080 Triennial Redetermination (Redet) of the Average Current Earnings (ACE).
H. Reverse offset alleged
If the DIB onset is March 1, 1981, or later and the MOET is September 1981 or later and the NH alleges DIB should not be offset because the State or other entity is taking a reverse offset, check the chart in DI 52105.001B in this section and the relevant state procedure to determine if it is a recognized plan. If it is not, obtain a copy of the law or plan.
If the plan was in effect on or before February 18, 1981, submit the plan per DI 52145.010. Obtain a repay statement if the NH insists on full benefits while a legal opinion is pending.
If the law or plan was not in effect on February 18, 1981, explain to the NH that new plans or changes to plans after that date are not recognized. Do not remove offset.
If DIB onset is prior to March 1, 1981, or MOET is prior to September 1981, process the case per DI 52105.001F.2. in this section.