The Interplay Between Social Security and Workers' Compensation Benefits - Part 2

Section 202 (w) of the Social Security Act, 42 U.S.C. 402, provides, in pertinent part:

Increase in Old-Age Insurance Benefit Amounts on Account of Delayed Retirement

(w)(1) The amount of an old-age insurance benefit (other than a benefit based on a primary insurance amount determined under section 215(a)(3) as in effect in December 1978 or section 215(a)(1)(C)(i) as in effect thereafter) which is payable without regard to this subsection to an individual shall be increased by—

(A) the applicable percentage (as determined under paragraph (6)) of such amount, multiplied by

(B) the number (if any) of the increment months for such individual.

(2) For purposes of this subsection, the number of increment months for any individual shall be a number equal to the total number of the months—

(A) which have elapsed after the month before the month in which such individual attained retirement age (as defined in section 216(l)) or (if later) December 1970 and prior to the month in which such individual attained age 70, and

(B) with respect to which—

(i) such individual was a fully insured individual (as defined in section 214(a)),

(ii) such individual either was not entitled to an old-age insurance benefit or, if so entitled, did not receive benefits pursuant to a request by such individual that benefits not be paid, and

(iii) such individual was not subject to a penalty imposed under section 1129A.

. . .

Section 202 (w) of the Social Security Act, 42 U.S.C. 402

On the Social Security Administration’s official web site, there is a comprehensive chart which outlines the percentage of increase in one’s benefits if retirement is delayed beyond full retirement age. This increase applies up to age 70 and is outlined below:

Increase for Delayed Retirement
Year of BirthYearly Rate of IncreaseMonthly Rate of Increase
1933-1934
5.5%
11/24 of 1%
1935-1936
6.0%
1/2 of 1%
1937-1938
6.5%
13/24 of 1%

Increase for Delayed Retirement
Year of BirthYearly Rate of IncreaseMonthly Rate of Increase
1939-1940
7.0%
7/12 of 1%
1941-1942
7.5%
5/8 of 1%
1943 or later
8.0%
2/3 of 1%

See http://www.ssa.gov/retire2/delayret.htm.

Another practical reason to delay one’s receipt of Social Security Retirement benefits would be to avoid an employer’s argument that it is entitled to a suspension on the grounds that a claimant has removed himself from the work force. See Fitchett vs. WCAB (School District of Philadelphia), 2013 Pa. Cmwlth. Lexis 95 (April 18, 2013), wherein the court held that the Workers’ Compensation Judge did not improperly suspend benefits on the grounds that the claimant had voluntarily retired when the claimant elected to receive Social Security Retirement and pension benefits while still receiving workers’ compensation benefits. The court emphasized the WCJ’s following findings of fact, which supported the suspension:

Claimant's testimony, however, did not persuade the WCJ, who noted Claimant applied for her Social Security and pension retirement benefits before Employer suspended her benefits in 2003. Moreover, after Employer reinstated Claimant's indemnity benefits in June 2005, Claimant continued to receive Social Security benefits and retirement pension benefits. In addition, the WCJ found nearly all of Claimant's work-related injuries, consisting mostly of strains and sprains, ultimately resolved. However, Claimant did not look for any type of work.

"[A]n employer need not prove the availability of suitable work when the employer establishes, under the totality of the circumstances, that the claimant has voluntarily retired from the workforce." Krushauskas, 56 A.3d at 73 (citing City of Pittsburgh v. Workers' Comp. Appeal Bd. (Robinson), 4 A.3d 1130 (Pa. Cmwlth. 2010), aff'd, ___ Pa. ___, ___ A.3d ___, 2013 Pa. LEXIS 517 (Pa., No. 18 WAP 2011, filed March 25, 2013)). Where a claimant accepts a retirement pension, she is presumed to have voluntarily retired from the workforce. Id. In such a case, the employer is entitled to a suspension unless the claimant can show she is seeking employment or that her work injury forced her to retire. Id.

Here, Claimant accepted a retirement pension and Social Security old age benefits, but claimed she would return to work for Employer when able to do so. Claimant did not testify about looking for any other type of work in the labor market. "The mere possibility that a retired worker may, upon some future time, seek employment does not transform a voluntary retirement from the labor market into a continuing compensable disability." Cnty. of Allegheny v. Workers' Comp. Appeal Bd. (Weis), 872 A.2d 263, 265 (Pa. Cmwlth. 2005) (quoting Se. Pa. Transp. Auth. v. Workmen's Comp. Appeal Bd. (Henderson), 543 Pa. 74, 79, 669 A.2d 911, 913 (1995)). Further, the WCJ did not believe Claimant's testimony that she intended to return to the workforce. This credibility determination is within the WCJ's province as fact finder. Krushauskas. Accordingly, the WCJ did not err in suspending Claimant's benefits based on substantial evidence that she voluntarily retired from the workforce. Id.

Id. at pp. 19-21.

B. Social Security Disability Benefits

When a workers’ compensation claimant is simultaneously receiving Social Security Disability (SSDI) and workers’ compensation benefits, his workers’ compensation benefits are primary, but the Social Security Administration (SSA) is entitled to an offset based on the claimant’s workers’ compensation income. Pursuant to Section 224 of the Social Security Act, 42 U.S.C. § 424a, the Social Security Administration will reduce the recipient's federal benefits to the extent that the combined monthly benefits exceed eighty percent of the recipient's average pre-disability earnings. 42 U.S.C. § 424a(a)(5); 20 C.F.R. § 404.408 (2003). Congress instituted this "offset" provision to ensure that claimants did not receive income in excess of their pre-disability earnings, reducing their incentive to return to work. See Richardson v. Belcher, 404 U.S. 78, 83 (1971); Freeman v. Harris, 625 F.2d 1303, 1306 (5th Cir. 1980).” See POMS, PR 04-086.

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