BASIC (09-08)

DI 52125.015 Determining Public Disability Benefit (PDB) Offset for State and Local Employment

A. Who is covered

Most State and local government employees, if covered, are covered under section 218 of the Social Security Act, i.e., their wages are subject to Federal Insurance Contribution Act (FICA) taxes and are, therefore, considered “covered” wages (or “covered” employment, or "covered" service). Generally, SSA does not offset DIB if a PDB is based on covered employment. Therefore, in many instances, a PDB based on State or local employment is not offsettable.

  • Be alert to situations where State or local employment was not covered or where a benefit to a State or local employee is not “based on” his or her employment. (See DI 52125.001A.3. for the definition of "based on.")

  • State and local government employees hired prior to 04/01/1986 may be covered for “Medicare only” under section 218 and may or may not have SSA covered service for PDB purposes. PDBs paid to the number holder (NH) based on SSA covered service will not cause offset, but PDBs based on non-covered service will cause offset.

  • State and local government employees hired 04/01/1986 or later who are covered for “Medicare only” under section 210 of the Social Security Act do not have SSA covered service for PDB purposes. PDBs paid to these disabled workers cause offset. See RS 01505.025 - Introduction to State and Local Coverage.

B. Anomalies - Public and private employees paid under the same State law or plan

Anomalies can occur under the offset provisions when a State law or plan provides for disability benefits for both public and private employees. For example:

  • When such disability benefits are paid to a private employee (i.e., one that is not considered a State or local employee), DIB is offset whether the employment was covered under section 210 or not.

  • When the same disability benefits are paid to a State or local employee, and are based on State or local employment all or substantially all of which is covered under section 218, DIB is not offset.

  • Finally, this same disability benefit, if paid to a State or local employee “based on” State or local employment not covered under section 218, would cause offset of DIB.

NOTE: A private employee may have had some State or local, as well as private, employment. If this is the case, verify whether all or substantially all of the employment used to determine eligibility to or compute the amount of the disability benefit was covered under section 218.

C. How to verify covered employment

Review the file to verify covered employment from such evidence as:

  1. Summaries of State Agreements which establish periods of State and local coverage. Document the file with a photocopy of the page from the Summaries or use an SSA 795 to explain where the verification came from.

  2. Detailed Earnings Query (DEQY) for employment after 1977.

  3. SSA-1709 Request for Workers' Compensation/Public Disability Benefit Information - responses to questions 10 and 11.

  4. Employer Identification Number (EIN) beginning with “69” indicate covered State or local employment.

  5. W- 2 form.

D. When coverage determination cannot be made

If it is still unclear, after full development, whether the disability is “based on” covered State or local employment, take the following actions:

  1. Submit the case to the processing center (PC) and include all development.

  2. Obtain a repayment statement. If the claimant refuses to sign a statement, document the file. See instructions in DI 52140.001 - Field Office (FO) Responsibilities for Workers’ Compensation/Public Disability Benefit (WC/PDB) Offset.

  3. Do not impose offset unless some other offsettable workers' compensation/public disability benefit (WC/PDB) payment is also being received.

NOTE: If the file is not available to the PC for review, request the information from the appropriate Information Retrieval Group (IRG) unit. For information about specific State PDBs, see DI 52135.001 - State Specific Public Disability Benefit (PDB) Procedures.