Maine Panel Rejects Employer's Challenge to ALJ Ruling on Social Security Offset

Augusta, ME (WorkersCompensation.com) -- When employees beginning receiving Social Security retirement benefits, it changes what their employers owe in workers’ compensation benefits, but workers can delay receiving Social Security if they choose, which can affect the math on what benefits an employer must pay. 

Such was the case in Pratt v. S.D. Warren Co., No. 23-01 (Me. W.C.B. App. Div. 01/03/23), where an employer thought it was entitled to more of an offset than what an administrative law judge awarded, but came up short in its argument. 

A worker who received workers’ compensation benefits applied for Social Security disability benefits at age 63. He received those benefits until he turned 66, his full retirement age for Social Security purposes. His disability benefits then automatically converted to old-age Social Security benefits. 

The worker elected to defer payment of his old-age benefits until he reached the age of 70. Later, the employer filed a petition for approval of discontinuance of incapacity benefits, claiming that the worker failed to comply with a provision of Maine law that requires employees receiving workers’ compensation benefits to apply for old-age benefits when they reach the appropriate age. 

An administrative law judge found that the state’s Workers’ Compensation Act did not prohibit the worker from deferring receipt of old age benefits, and the Appellate Division affirmed the ruling. Thereafter, the worker filed a petition for review and petition to determine Social Security offset. The ALJ denied the former but granted the latter.  

The ALJ determined that the Social Security offset was $364.46 per week and further determined that the employer was required to pay partial incapacity benefits at the rate of $10.13. The ALJ also determined that the employer was entitled to a credit of $21,241.75 for benefits paid while the worker received both Social Security retirement and full workers’ compensation benefits. 

Finding that the employer did not carry its burden of persuasion that the worker’s permanent impairment level fell below the threshold for continued partial payments, the ALJ denied the employer’s request to terminate payment of partial incapacity benefits. The employer appealed. 

Under Maine law, permanent impairment from prior work injuries may be “stacked” onto the permanent impairment from the injury at issue if it combines with the work injury at issue to contribute to the employee’s incapacity. 

In this case, the Maine Appellate Division pointed out that the worker’s prior shoulder injuries arose out of and in the course of his employment and could be stacked with the injury at issue. 

“It was within the ALJ’s purview to conclude that [the employer] did not meet its ultimate burden of persuasion that the [worker’s] permanent impairment fell below the threshold, and to disallow termination of benefits,” the division wrote. 

The Appellate Division also upheld the ALJ’s method of calculating the offset, highlighting that the ALJ’s approach was “practical” and was consistent with state law and “Social Security Administration publications and rules.” 

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