TN 6 (08-07)
GN 04030.080 Reopening When Workers' Compensation/Public Disability Benefits Offset is Involved
Soc. Sec. Act, Sec. 224(a); 20 CFR 404.408
The rules of administrative finality apply to initial determinations involving workers' compensation/public disability benefits (WC/PDB) offset the same as to any other initial determination. (See GN 03101.070 - GN 03101.080 for additional information on initial determinations.)
Since WC/PDB frequently involve changes, it is helpful to have a good understanding of the statement made in GN 04001.030 which says we can make a new initial determination whenever there is a change in the factual situation.
It is important to distinguish between a change in the factual situation and new and material evidence (GN 04010.030). Any new WC/PDB evidence must be carefully reviewed to determine if the evidence relates back to a prior offset determination (possible new and material evidence) or represents a change in WC/PDB payments occurring after the date of the initial determination (possible change in the factual situation).
For WC/PDB cases with a DIB onset before 03/01/81 or a DIB MOET before 09/1981, offset is imposed only in months after the month SSA receives “notice” of the WC/PDB entitlement. For WC/PDB cases with a DIB MOET after 09/1981, WC offset is imposed beginning with the month in which the individual begins receiving both WC and SSA Disability regardless of the date of the “notice.” For additional information see the policy in DI 52170.040 and DI 52170.040.
The following is intended to clarify how to apply the rules of administrative finality to WC/PDB offset cases:
1. Initial Adjudicator Does Not Address the WC/PDB
When we initially entitled someone to benefits, there was information in the file that the claimant was receiving WC. However, the adjudicator did not address the WC in any way and no paragraph was sent.
SSA's notice of entitlement is a notice of an initial determination on all issues which were before the adjudicator. Therefore, an initial determination has been made on the WC; i.e., the adjudicator has “determined,” albeit erroneously, that WC is not an issue or does not apply in this case.
More than 4 years after the date of the notice of the initial determination we discover the error. If the claimant is still receiving the same amount of WC on which the initial determination was based, we cannot correct the error and cannot impose offset since none of the exceptions for unlimited reopening (GN 04020.001) apply.
However, if there was any change in the WC (increase or decrease in amount, benefits stopped and started, lump-sum awarded, etc.) at any time after the date of the initial determination, we can make a new initial determination and impose WC offset effective with the date of the change (subject to the offset rules) using the full amount of the WC (not just the amount of any increase or decrease). In addition, if the change had a retroactive effect, we can impose WC retroactively (possibly even to a date before the initial determination) following the offset rules in DI 52100.000 and DI 52170.040. For example, if in May 2006 the WC is increased retroactively to January 2002, we could impose WC offset retroactively to January 2002 using the full increased amount of the WC (even if we made the original determination in February 2002; i.e., after the effective date of the change). (Of course, in a pre-81 amendment case, we could only adjust due to the WC increase the month after the month of notice (see DI 52100.00, DI 52170.040).
2. Adjudicator Did Not Address WC Issue — Subsequent Auxiliary Files
Same situation as Example 1 where claimant who alleged receipt of WC was entitled to benefits but the adjudicator did not address the WC issue when entitling the claimant.
More than 4 years after the date of the notice of the initial determination, a subsequent auxiliary living in a separate household from the NH and the other auxiliaries files for benefits.
At that time we discover our failure to impose WC offset. We develop WC and find that the NH is still receiving the same amount he told us he was receiving when he filed for Social Security benefits.
We can compute the WC offset and impose offset against the benefits payable to the newly entitled auxiliary. However, since there has been no change in the WC, we still cannot impose offset against the NH and those auxiliaries already on the rolls.
3. Unverified WC Rate Is Incorrect
On his application NH tells us he is receiving WC of $400 per month. We fail to verify the amount and merely offset using his allegation. Five years later we find out it should have been $100 per week (or $433.30 per month).
We are bound by the initial determination which was made using WC of $400 per month.
Initial awards often include a paragraph saying we based the WC offset on unverified information. The use of such a paragraph has no effect on whether we can reopen the initial determination more than four years later when we find out the actual amount.
However, if there has been a change in the WC after the initial determination, we can make a new initial determination which would be effective with the beginning date of the WC change (subject to the offset rules).
NOTE: If fraud or similar fault is established, the claim could be reopened based on the unrestricted reopening policy in GN 04020.010.
4. We Take No Action On Report Of WC
A NH states on his application that he has filed for WC but has not yet received any payments. We verify his allegation and do not impose offset.
When he is awarded WC, he sends us a copy of his WC award letter. We file it in the folder or document the information in shared processes or on the report of contact (RPOC) screen and do not impose offset.
Five years later we discover the WC award letter and realize our mistake. Since we never made an initial determination and did not send a notice of an initial determination on the WC award, we can impose offset effective the first date it should have been imposed. (See GN 04001.030 regarding the failure to make a determination.)
5. WC Awarded After Initial Entitlement
At some date after the initial determination which first entitled her to Social Security benefits was made, a claimant is first awarded WC payments.
We can make a new initial determination and impose offset the first possible month the offset rules will allow. Even if we are not advised of the WC award until many years after the WC Board awards the WC, we can still make an initial determination on this issue since one was not previously made and impose offset the first possible month the offset rules allow.
In addition, if the claimant tells us when the WC award is made but we do not make an initial determination based on the report, (and thus, do not send a notice of an initial determination), we can impose the offset whenever we discover the error (retroactive to the first possible month of offset.) (See GN 04001.030 regarding the failure to make a determination.)
6. We Take No Action On WC Award Received With Subsequent Auxiliary Claims
A NH states on his application that he has filed for WC but has not yet received any payments. We verify his allegation and do not impose offset. Several months later WC is awarded.
When we receive a copy of the WC award we also receive an application for auxiliary benefits. The adjudicator fails to take any action on the WC award and entitles the auxiliaries to their full benefit amounts, i.e., the auxiliaries receive an award certificate which does not address WC offset.
We discover our error more than 4 years after the date of the notice of the initial determination which was sent to the auxiliaries. The auxiliaries' benefits are protected, but HA's are not.
Therefore, we would compute offset the normal way, i.e., first against the auxiliaries' benefits and then any remaining against HA's. But we would only actually impose any remaining offset against HA.
Of course, if there had been any change in the WC after the date of the initial determination of entitlement to auxiliary benefits, we can make a new initial determination and impose offset against the auxiliaries using the full amount of the WC effective with the date of the change (subject to the offset rules).
7. Error In Factor Used To Compute Offset
When we compute offset we make an error (e.g., compute ACE, TFB, or excludable expenses incorrectly) which results in the incorrect benefit amount being paid after offset.
If we discover the error within 4 years we can correct the amount payable after offset.
After 4 years we can correct the amount payable after offset only if it would be favorable to the claimant.
However, even after 4 years, if there is a change in the amount of WC that occurred after the initial determination, when we recompute offset using the new amount, we can compute offset correctly (e.g., use the correct ACE, TFB, or excludable expenses) effective with the date of the change.
8. Error In Lump Sum Proration
A claimant is awarded a lump sum WC award. We impose offset, prorate the lump sum, and send the claimant a notice which includes the amount payable after offset and the date the lump sum will be fully prorated.
However, we prorated the lump sum incorrectly and advised the claimant that offset will be removed sooner than it should. The case is called up 5 years after the date of the notice to remove offset, since that is shown as the prorated ending date.
In removing offset, the adjudicator discovers we made an error and the lump sum is not fully prorated until 6 years after the date of our notice.
Since it is more than 4 years after the date of the notice of the initial determination, and since correcting the offset proration from 5 years to 6 years would be unfavorable to the claimant, we cannot revise our original determination, i.e., we have to remove offset effective with the date we said in the notice of the initial determination.