Opinion
W.C. No. 3-048-712
April 30, 1996
FINAL ORDER
The respondents seek review of an order of Administrative Law Judge Martinez (ALJ) which denied their request to reduce permanent total disability benefits based on the claimant's receipt of social security benefits. We reverse.
The ALJ's order was based upon the following stipulated facts. The claimant is permanently and totally disabled as a result of an industrial injury on January 6, 1986. The claimant applied for Social Security Disability Insurance (SSDI) benefits, but did not qualify based on her wage record. In 1988 the claimant was awarded SSDI benefits based upon her disability from the industrial injury, her age, and the wage record of her deceased husband.
The respondents requested an order allowing them to offset their liability for permanent total disability benefits, pursuant to former § 8-51-101(1)(c), C.R.S. (1986 Repl. Vol. 3B) [currently codified at § 8-42-103(1)(c)(I), C.R.S. (1995 Cum. Supp.)]. That statute provides that:
"In cases where it is determined that periodic disability benefits granted by the federal old-age, survivors, and disability insurance act are payable to an individual and his dependents, the aggregate benefits payable for . . . . permanent total disability pursuant to this section shall be reduced, but not below zero, by an amount equal as nearly as practical to one-half such federal periodic benefits."
Relying on Myers v. State of Colorado, 428 P.2d 83 (Colo. 1967), the ALJ determined that former § 8-51-101(1)(c) is designed to prevent a "double recovery" of disability benefits financed by the employer. Because the claimant's SSDI benefits are based on the wage record of her husband, and the respondent-employer did not pay taxes on her husband's wages, the ALJ determined that the respondent-employer did not contribute to the source of the claimant's SSDI benefits. Therefore, the ALJ determined that the claimant's receipt of workers' compensation benefits and SSDI benefits does not constitute a double recovery "at the expense" of the respondent-employer.
On appeal, the respondents contend that the ALJ erred in construing § 8-51-101(1)(c) as limited to circumstances where the employer contributes to the source of the SSDI benefits. We agree.
The Colorado Supreme Court has stated that the purpose of the offset statute is to prevent a "double recovery," which the Court defines as the payment of full workers' compensation benefits and social security benefits for the same disability. L.E.L Construction v. Goode, 867 P.2d 875 (Colo. 1994) ; Johnson v. Industrial Commission, 761 P.2d 1140 (Colo. 1988) ; Engelbrecht v. Hartford Accident Indemnity Co., 680 P.2d 231, 233 (Colo. 1984) [reversing Dailey v. Industrial Commission, 651 P.2d 1223, 1225 (Colo.App. 1982), where the Court of Appeals stated that the purpose of former § 8-51-101(1)(c) is to "prevent duplication of benefits at the employer's expense."]; Circle K. Corp. v. Industrial Claim Appeals Office, 809 P.2d 1116 (Colo.App. 1991).
Admittedly, the courts have also stated that the offset provisions are designed to prevent double recovery of workers' compensation and social security benefits "at the expense of the employer." Myers v. State of Colorado, supra; Sparling v. Colo. Dept. of Highways, 812 P.2d 686 (Colo.App. 1990); Scriven v. Industrial Commission, 736 P.2d 414 (Colo.App. 1987). However, these cases do not involve the application of § 8-51-101(1)(c). Rather, Myers, Sparling, and Scriven all pertain to the application of former § 8-51-101(1)(d), C.R.S. (1986 Repl. Vol. 3B) [currently codified at § 8-42-103(1)(d)(I), C.R.S. (1995 Cum. Supp.)]. As noted by the court in Sampson v. Weld County School District, 786 P.2d 488 (Colo.App. 1989), former § 8-51-101(1)(d) is expressly limited to an offset for disability benefits payable under a pension or disability plan "financed in whole or in part by the employer."
In contrast, the Sampson court observed that former § 8-51-101(1)(c) "does not contain an explicit requirement indicating that the offset is dependent on the employer having paid Social Security taxes," and the court declined to read such a requirement into the statute. 786 P.2d at 489. Consequently, the Sampson court concluded that an employer is entitled to the statutory offset even if the employer has not contributed to the source of the SSDI benefits by the payment of social security taxes on the claimant's wages.
We conclude that Sampson v. Weld County School District, supra, is dispositive of the issue presented here. The respondents' right to an offset is not dependent on the respondents' payment of social security taxes in connection with the source of the claimant's SSDI benefits. Consequently, the ALJ erred in denying the offset on that basis.
Moreover, the stipulated facts indicate that the claimant is receiving an award of workers' compensation benefits and SSDI benefits for the same physical disability. This fact compels a conclusion that the respondents are entitled to an offset under former § 8-51-101(1)(c).
IT IS THEREFORE ORDERED that the ALJ's order dated December 29, 1995, is reversed. The respondents may reduce the claimant's permanent total disability benefits in accordance with former § 8-51-101(1)(c), C.R.S. (1986 Repl. Vol. 3B), based on the claimant's SSDI benefits.
INDUSTRIAL CLAIM APPEALS PANEL
____________________________________ Kathy E. Dean
____________________________________ Bill WhitacreNOTICE
This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date this Order is mailed, pursuant to section 8-43-301(10) and 307, C.R.S. (1995 Cum. Supp.).
Copies of this decision were mailed April 30, 1996 to the following parties:
Mary Weathers, 686 Ladore, Grand Junction, CO 81506
Mary Jane Broom, 2678 Continental Dr., Grand Junction, CO 81506-1801
State Farm Fire Casualty Co., Attn: Dan Dobbins, 4380 S. Syracuse St., #200, Denver, CO 80237
Michael A. Perales, Esq. Eliot Wiener, Esq., 999 18th St., Ste. 3100, Denver, CO 80202
(For the Respondents)
Gudrun Rice, Esq., P.O. Box 3207, Grand Junction, CO 81502 (For the Claimant)
BY: _______________________