You have asked whether the worker's compensation benefits which Timothy T~ received
                  is subject to offset under the Social Security Act's offset provision. We have concluded
                  that the payments which Mr. T~ received from the worker's compensation insurance carrier
                  were not worker's compensation payments. Rather, the money represented the insurance
                  carrier's share of the attorney's fee for Mr. T~'s third party tort action. Therefore,
                  the payments were not subject to offset.
               
               Facts
               We understand the relevant facts to be as follows:
               Timothy T~, who worked as a security guard, was injured while patrolling his job site.
                  The injury resulted in the removal of his left eye. Mr. T~ was awarded workers' compensation
                  benefits.
               
               He also received a settlement from the owner of the premises in a tort action for
                  the same injury.
               
               Mr. T~'s workers' compensation award included 300 weeks of permanent partial disability
                  at $256.08 for a total of $76,824.00. He had been paid $23,272.32, and a balance of
                  unpaid partial permanent disability in the amount of $54,551.68 remained. Mr. T~'s
                  settlement of the action against the owner of the building was $160,500. Inasmuch
                  as the third-party payment exceeded the total compensation amount, the insurance carrier,
                  Kemper Insurance Company ("Kemper"), was entitled to assert a lien against the third-party
                  payment under New Jersey law. Kemper did so and suspended monthly payments.
               
               Under New Jersey law, Kemper Insurance was not entitled to reimbursement for all the
                  worker's compensation it had paid because Kemper was responsible for its share (one-third)
                  of "attorney's fee" in the third party recovery. Because Kemper had already paid the
                  sum of $22,272.32 to Mr. T~, Mr. T~'s attorney reimbursed Kemper for two-thirds of
                  that amount. The remaining one-third represented Kemper's share of the attorney's
                  fee. The balance owed to Mr. T~ by Kemper on his workers' compensation award was $54,551.68.
                  However, in light of the third-party award, Kemper was only responsible for one-third
                  of that amount, $18,183.89, (its share of the attorney's fee in the tort action).
               
               Kemper subtracted from that sum $1,800.00, which represented Mr. T~'s share of attorneys
                  fees to the workers' compensation attorney. Accordingly, Kemper issued a check in
                  the amount of $16,383.89 to Mr. T~.
               
               Mr. T~ was found disabled as of September 5, 1997. He began receiving social security
                  disability benefits in March 1998, after the five-month waiting period. The Social
                  Security Administration ("SSA") has reduced Mr. T~'s social security benefits as a
                  result of his worker's compensation award. SSA offset Mr. T~'s benefits at the weekly
                  rate specified in the worker's compensation settlement agreement.
               
               Federal Statutory and Regulatory Standard for Reduction of Disability Insurance Benefits
                  Based on Receipt of Workers' Compensation Benefits. When an individual who is entitled
                  to social security disability benefits is also entitled to workers' compensation benefits,
                  the Social Security Act ("the Act") directs SSA to offset the workers' compensation
                  benefits against the social security benefits, so that the total benefits received
                  from both sources by the individual do not exceed eighty percent of his or her pre-disability
                  income. 42 U.S.C. §424a(a).
               
               The Act further provides that:
               (b) Reduction where benefits payable on other than monthly basis
               If any periodic benefit for a total or partial disability under . . . [a workmen's
                  compensation law or plan of the United States or a state] is payable on other than
                  a monthly basis (excluding a benefit payable as a lump sum except to the extent that
                  it is a commutation of, or a substitute for, periodic payments), the reduction under
                  this section shall be made at such time or times and in such amounts as the Commissioner
                  finds will approximate as nearly as practicable the reduction prescribed by [42 U.S.C.
                  § 424a(a)](emphasis added).
               
               42 U.S.C. § 424a(b). Accord 20 C.F.R. § 404.408(g).
               New Jersey Statutory Provisions and Case law
               Under the New Jersey Workers' Compensation statute, an employer or his workers' compensation
                  carrier, is entitled to reimbursement from the proceeds that an employee recovers
                  from a third-party in a tort action. N.J.S.A. 34:15-40. The statute provides that
                  if a third party tort recovery is equal to or greater than the liability of the employer
                  or his insurance carrier, "the employer or his insurance carrier shall be released
                  from such liability and shall be entitled to be reimbursed, . . . for the medical
                  expenses incurred and compensation payments theretofore paid to the injured employee
                  or his dependents less employee's expenses of suit and attorney's fee . . ." Id. Thus, this statutory provision permits an employer or his workers' compensation insurance
                  carrier to assert a lien on the proceeds of a third-party recovery obtained by the
                  injured employee. Wunschel v. City of Jersey City, 208 N.J. Super. 234, 505 (A.D. 1986); Pacillo v. Harris Manufacturing Company, 182 N.J. Super. 322 (L.D. 1981); McMullen v. Maryland Cas. Co., 127 N.J. Super 231 (A.D.1974). The lien secures reimbursement to the employer or
                  his insurer of medical expenses incurred and compensation payments paid to the employee,
                  less the employer's (or his insurer's) share of "attorney's fee" in the third party
                  recovery.
               
               The employer's share of the attorney's fee is measured by the "total compensation
                  liability under the act" from which it has been released. P~ 182 N.J. Super 322, Owens v. C & R Waste Material, 76 N.J. 584 (1978). An employer's (or his insurer's) share of the attorney's fee
                  is not considered compensation. O~ at 589.
               
               Legal Analysis and Conclusion
               Although the scope of the Social Security Act's offset provision is broad, Bubnis v. Apfel, 150 F.3d 177 (May 15, 1998); Hodge v. Shalala, 27 F.3d 430, 432 (9th Cir. 1994); Shabbaz v. Bowen, 912 F.2d 532, 533 (2d Cir. 1990), under the facts presented in this case, the money
                  paid to Mr. T~ by Kemper is not subject to offset.
               
               Mr. T~'s attorney reimbursed Kemper in an amount equal to two-thirds of the $22,272.32
                  which Mr. T~ had received in worker's compensation benefits. The remaining one-third
                  represented the statutorily authorized attorney's fee. We also note that Kemper paid
                  the remainder of the money which it owed to Mr. T~ in a "lumpsum" check of $16,383.89.
                  As we already noted, this sum represented Kemper's portion of the attorney's fee in
                  the tort action.
               
               In O~, the court made it clear that an employer's share of the attorney's fee is not compensation.
                  Rather, "it is the employer's (or carrier's) contribution toward the legal expenses
                  incurred in the third-party action from which it benefited." Owens v. C & R Waste Material at 589 (citations omitted).
               
               Thus, we conclude that the money which Mr. T~ received from Kemper does not represent
                  worker's compensation benefits and is therefore not subject to offset. Accordingly,
                  we believe that Mr. T~ has been underpaid social security disability benefits.