You requested assistance in determining the effective date for removal of a workers'
compensation offset where the date of "dis-entitlement" to workers' compensation benefits
pre-dated the date which payment ended by 17 months. Additionally, you sought explanation
regarding "supersedeas" in this matter and in the context of workers' compensation
At the time Carlotta B~'s claim for disability insurance benefits (DIB) was granted,
she was receiving bi-weekly state workers' compensation benefits. Because of B~'s
concurrent entitlement to DIB and workers' compensation benefits, her DIB was reduced
or offset pursuant to 20 C.F.R. § 404.408(a)(2); 42 U.SC. § 424a(a). On April 5, 1999,
B~'s physician released her to return to a modified job at her employer. On August
31, 1999, B~'s employer filed a petition to suspend her workers' compensation benefits.
We requested a copy of the employer's petition to suspend and you forwarded to us
a copy of the petition received from B~'s attorney. The petition shows that the employer
marked as "yes" the area on the petition form requesting supersedeas. (See attached). On September 26, 2000, Mark A. P~, a Workers' Compensation Judge (WCJ),
issued an order granting B~'s employer's petition for suspension effective April 5,
The September 26, 2000 order authorized B~'s employer to cease paying B~’s workers'
compensation benefits. The "Conclusions of Law" section of the WCJ decision states
clearly that there will be no ongoing wage benefits due to B~. We contacted Fran W~,
an adjuster at Fireman's Fund Insurance Company, the employer's workers' compensation
carrier, to obtain the exact date on which payments ended and she informed us that
October 2, 2000 was the date of the last payment issued to B~. Because B~ had received
bi-weekly workers' compensation payments, the next payment that would have been due
to her had her benefits not been suspended would have been dated October 16, 2000.
Therefore, she received half of her usual workers' compensation benefits for the month
of October 2000.
The purpose of the Social Security Act's offset provision and the underlying policy
concerns which gave rise to its inclusion in the Act dictate when B~'s DIB should
no longer be reduced or "offset". The policy behind the social security offset is
that an individual should not receive in combined disability benefits greater than
80% of her pre-disability earnings, otherwise there would be no incentive for a return
to work. See 20 C.F.R. § 404.408(c)(i); K~ v. C~, 55 F.3d 857, 860 (3d Cir. 1995) (discussing Congress'
intent to prevent payment of excessive combined benefits/avoid duplication of benefits);
and W~ v. A~, 81 F. Supp.2d 649, 652 (W.D.Va. 2000) (stating "[t]he purpose of this
provision [the reduction in social security benefits] is to ensure that a claimant
does not receive double benefits for the same injury, reducing his or her incentive
to return to work.") The key factor, then, is an individual's actual receipt of payment.
Therefore, the key in this matter is determining the time periods when B~ actually
received workers' compensation benefits.
Notably, both the POMS and the offset regulation incorporate the Act's concern to
avoid duplication of benefits, although each employs different language. The POMS
uses "payment ending" language and the regulation uses "entitlement" language. As
you noted in your memorandum to us, POMS DI 52150.025 states that offset will be removed (or not imposed) effective with the earliest month
that periodic workers' compensation payments end. The regulation states in relevant
part that a reduction (offset) is required when the individual entitled to DIB is
also, for that month, concurrently entitled to a periodic benefit (including workers'
compensation) on account of a total or partial disability under a law or plan of a
state. See 20 C.F.R. § 404.408(a)(2). The notion of "entitlement" to other periodic benefits
in the regulation presumes that an individual who is entitled to such benefits will
actually receive them.
In this matter, although B~ was adjudicated as not entitled to workers' compensation
payments after April 5, 1999 per the suspension order, her payments did not end until
October 2000. Pending resolution of B~'s employer's petition to suspend, the employer
was obligated to continue paying workers' compensation benefits to B~; therefore,
arguably, she was still entitled to them at the time she actually received them; i.e.,
her claim was status quo unless and until the WCJ ruled otherwise. As noted above,
B~’s continued receipt of benefits through October 2000 is our primary concern, not
the date the WCJ determined that she could have gone back to work. Significantly,
the Workers' Compensation Act contains no provisions requiring a claimant/employee
to repay "undeserved" benefits when it has subsequently been determined that she was
not entitled to benefits for a designated period. Thus, the workers' compensation
benefits which B~ received from April 5, 1999 through October 2, 2000 are not considered
something similar to a social security "overpayment" and B~ is not obligated to pay
her employer back. Therefore, the offset of B~'s DIB should be removed as of October
2000, as this is when she ceased receiving dual payments and when the possibility
of her receiving a windfall ended. If the offset were removed as of April 5, 1999,
B~ would, essentially, be "receiving double"- both social security disability benefits
and workers' compensation benefits for 17 months, far in excess of her pre-disability
income, which would run counter to the policy behind the social security offset provision.
Further, while the Workers' Compensation Act does not require a claimant to pay benefits
back, the Act does provide for reimbursement to an employer from a separate fund for
paying out benefits to which a claimant was ultimately found not entitled. This procedure
involves the "supersedeas" which has no impact on the offset issue in this matter,
but which warrants explanation based on the concern expressed in your memorandum.
The supersedeas is an urgent request for immediate resolution of the issue at hand,
without the taking of evidence. It acts as a stay of all proceedings and is only granted
in rare circumstances. See generally 77 P.S. § 774(2) ("A supersedeas shall serve to suspend the payment of compensation
in whole or to such extent as the facts alleged in the petition would, if proved,
It is apparent that B~'s employer requested a supersedeas to preserve the right to
seek reimbursement from the Supersedeas Fund for any benefits that would be paid to
B~ pending resolution of the petition to suspend. The WCJ in this matter did not grant
the supersedeas request as evidenced by proceeding with evidentiary hearings in March
and August of 2000, where live witness testimony was taken, as well as the admission
of deposition testimony and other exhibits. (See page 2 of the WCJ decision). The lack of mention of the employer's supersedeas request
in the September 26, 2000 order is not significant because, by virtue of the WCJ's
taking evidence on the issue of suspension and proceeding with the matter, the supersedeas
request was deemed denied. See 34 Pa. Code § 131.43 ("Unless a supersedeas is granted by written order, it will
be deemed denied from the date of filing of the request"). Had the WCJ granted the
employer's request for supersedeas, a written order stating such would have been issued,
and the insurance carrier would have been authorized to suspend B~'s benefits immediately.
In terms of reimbursement from the Supersedeas Fund, if the employer requested supersedeas
and the WCJ denied the request, the employer can then apply to the Supersedeas Fund
for reimbursement. See 77 P.S. § 999(a) ("[i]f, in any case in which a supersedeas has been requested and
denied, . . . payments of compensation are made as a result thereof and upon the final
outcome of the proceedings, it is determined that such compensation was not, in fact,
payable, the insurer who has made such payments shall be reimbursed therefor"); see also Gallagher B~ Servs. v. Workers' Compensation Appeal Bd., 756 A.2d 702 (Pa. Commw. 2000). However, as noted above, whether B~'s employer sought
reimbursement has no bearing on the offset issue because the fact will not change
that B~ did receive workers' compensation benefits for the period April 5, 2000 through
October 2, 2000 and will not have to pay them back.
As a final note, the September 26, 2000 order to suspend payment of benefits, which
is distinct from the deemed denial of the employer's supersedeas request, was a final,
We contacted an assistant to the WCJ who issued the order to determine the current
status of B~'s claim and he indicated that B~ appealed the granting of the suspension
to the Workers' Compensation Appeal Board. This information is significant in that
now there is a possibility that the September 26, 2000 order suspending benefits could
be overturned, resulting in a reinstatement of B~'s benefits. If that occurs at some
time in the future and the employer is required to pay a lump sum of back due benefits,
the social security offset provision would apply to that lump sum and, of course,
to any ongoing benefits from that point.
Congress' intent in including an offset provision in the Social Security Act was to
prevent individuals from receiving double benefits, such that their income would exceed
that which they earned when they were gainfully employed. Therefore, the offset in
the instant matter should be removed in October 2000, which is the earliest month
that workers' compensation payments ended, or stated alternatively, when B~ ceased
receiving benefits. While B~ did receive a workers' compensation payment for the period
10/2/00 through 10/16/00, such that there is the potential for her to receive both
workers' compensation and DIB for the first half of October, we will defer the issue
of the exact date in October 2000 for of the removal of the offset to your program
expertise. Further, as explained above, "supersedeas" has no bearing on the date of
removal of offset in this matter.
In closing, because of the potential that B~'s benefits could be retroactively reinstated
should she succeed in her appeal, the status of her workers' compensation benefits
should be monitored on a regular basis. According to POMS DI 52150.025, until this matter is verified as closed and final, it should be diaried for six
months, and thereafter, to check the status of B~'s appeal. In this regard, it would
be helpful to keep the telephone number of the adjuster at the Fireman's Fund Insurance
Company in B~'s file, as she would know the employer's payout status at all times.
Additionally, should this memorandum be used as a reference in other workers' compensation
offset matters, we note, as a reminder, that it pertains to workers' compensation
law in Pennsylvania only.