DI 52135.001 Introduction to State Specific Public Disability Benefits (PDB)
Social Security Act, Section 224
The following states have special features related to their public disability benefit (PDB) plans to consider when applying the PDB offset provisions.
A. Federal Insurance Contributions Act (FICA)
The FICA may tax some PDB benefits. This taxation does not preclude offset of Social Security disability insurance benefits (DIB). SSA computes offset at the full payment rate before any FICA deductions.
B. PDB payable for a prescribed period
Code the verified expected end date when imposing offset where benefits are payable for only a prescribed period. When the end date is on the Master Beneficiary Record (MBR), Regular Transcript and Selection Pass Alerts (RETAP) sends a finder to T2 permitting the system to automatically adjust the Workers’ Compensation/Public Disability Benefit (WC/PDB).
EXCEPTION: RETAP (RT47) selects California PDB cases after 52 weeks; therefore, no manual diary is necessary unless payments are not expected to continue the usual 52 weeks.
Verify that PDB ceased, before resuming full DIB benefits.
If a State has a reverse offset plan, code the case with offset type “REV JURISDICTION”, and the appropriate start and stop dates. For additional instructions for coding the Interactive Computations (ICF) WC/PDB Claims Data (WCCD) screen, see DI 52165.010C.7.
C. Windfall Elimination Provision (WEP) consideration
If the PDB is a pension (as defined in RS 00605.360B.1.) and based at least in part on non-covered employment, you must consider WEP.
D. Conversion of a PDB to a retirement or service pension
The requirements for conversion of a PDB to a “service pension” differ between states/plans. The particular State law or local government plan pursuant to which the pension is paid determines whether the benefit in question is or is not a PDB. Because State laws and local government plans will differ, it is possible to find that some of these converted pensions will be PDBs and others will not.
Generally, the benefit no longer meets the definition of PDB set forth in Section 224 of the Act if the pension is no longer based on a disability where:
a worker receiving a PDB attains the age and years of service required for conversion of the pension to a service pension, AND
the worker is not required to still be disabled in order to be eligible.
If the worker clearly states that he or she must continue to be disabled in order to receive the service pension, the pension continues to be a PDB and offset procedures still apply.
Where there is a question or conflicting information, seek an opinion from the OGC Regional Chief Counsel's office with responsibility for the State in question on the particular State law or local government plan under which the pension is paid. See DI 52140.015 for information on preparing an OGC referral.