Old Age Social Security Benefits and Tennessee Workers Compensation Benefits

Ida May Fuller, the first recipient

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While Tennessee Workers Compensation law does not allow employers/insurers to benefits from the employee’s receipt of SSDI benefits, it does, however, give a break to them in certain situations regarding workers’ compensation permanent disability benefits when the employee is receiving old age Social Security retirement benefits.  Tennessee Code Annotated section 50-6-207(4)(A)(i) states as follows:

          (A)  (i)  For permanent total disability as defined in subdivision (4)(B), sixty-six and two-thirds percent (662/3%) of the wages received at the time of the injury, subject to the maximum weekly benefit and minimum weekly benefit; provided, that if the employee’s average weekly wages are equal to or greater than the minimum weekly benefit, the employee shall receive not less than the minimum weekly benefit; provided, further, that if the employee’s average weekly wages are less than the minimum weekly benefit, the employee shall receive the full amount of the employee’s average weekly wages, but in no event shall the compensation paid be less than the minimum weekly benefit. This compensation shall be paid during the period of the permanent total disability until the employee is, by age, eligible for full benefits in the Old Age Insurance Benefit Program under the Social Security Act, compiled in 42 U.S.C. § 401 et seq.; provided, that with respect to disabilities resulting from injuries that occur after sixty (60) years of age, regardless of the age of the employee, permanent total disability benefits are payable for a period of two hundred sixty (260) weeks. The compensation payments shall be reduced by the amount of any old age insurance benefit payments attributable to employer contributions that the employee may receive under title 42, chapter 7, title II of the Social Security Act, 42 U.S.C. § 401 et seq. Notwithstanding any statute or court decision to the contrary, the statutory social security offset provided by this section shall have no applicability to death benefits awarded to a deceased worker’s dependents pursuant to this chapter.

           In 2007, the statute was amended to add the prohibition of the application of the old age social security offset to death benefits.

          A worker age sixty (60) or older who is adjudged permanently and totally disabled will be subject to the offset of payments due to “any old age insurance benefit payments attributable to employer contributions that the employee may receive . . .”, but how much is the offset or what employer contributions count? 

         What about a worker who is not permanently and totally disabled that gets hurt after age sixty? 

         What about a case for spousal benefits where the worker was over age sixty or a case where the worker is getting Social Security benefits off of the spouses account and not his or her own? 

          The Tennessee Supreme Court has parsed out these issues, but it has not always produced coherent or consistent results.  Sometime the Court has been willing to judicially legislate because of “irrational results” while other times backing off in deference to the general assembly’s duty to write or modify the law despite recognizing the “irrational results” or language of the statute.

            The McCoy case dealt with two important issues under the offset statute: permanent, partial disability and those in which employer contributions were contemplated.  In McCoy v. T.T.C. Illinois Inc., 14 S.W.3r 734 (Tenn. 2000), the Tennessee Supreme Court for the first time was faced with deciding whether the offset applies to injuries other than those involving permanent and total disability.  The Court discussed the fact that the statute contains two directives dealing with workers over sixty who sustain injuries to the body as a whole: the 260 week cap and the Social Security offset.  Id. at 736.  The Court went on to discuss the Vogel case (Vogel v. Wells Fargo Guard Serv., 937 W.W.2d 856 (Tenn. 1996)), and its holding that the directive regarding the 260 week cap did apply to permanent partial disability even though the statute only mentions permanent and total disability “to avoid an otherwise irrational result.”  Id.  The Court then discussed its holding  in McIlvain v. Russell Stover  Candies, Inc., 996 S.W.2s 179 (Tenn. 1999), where it previously found that the statute does not apply in terms of the 260 week cap or the old age Social Security offset for injuries to scheduled members.  Id. at 737.  (A seemingly “irrational result” not disturbed by the Court)  See also Smith v. U.S. Pipe & Foundry Co., 14 S.W.3d 739 (Tenn. 2000).  

            Using the logic of Vogel and McIlvain, in terms of the 260 week cap (the 1st directive), the Court held that the second directive in the statute, the old age Social Security offset, applies to injuries to workers over age sixty resulting in permanent, partial disability to the body as a whole.  Id. 

This rule of statutory construction militates in favor of applying the Social Security offset in the same manner that the 260 week cap has previously been applied.  Moreover, the reasoning which prompted this Court’s decision in Vogel is clearly pertinent to the issue in this appeal.  Here, as in Vogel, were we to hold the Social Security offset applicable to permanent total disability benefits, but inapplicable to permanent partial disability benefits, a worker would receive more benefits from a determination of less disability.  We decline to construe the statute in a manner that would produce such an irrational result.  Accordingly, we hold that the Social Security offset contained in Tenn. Code Ann. §50-6-207(4)(A)(i) applies to workers over age sixty who suffer injuries to the body as a whole, regardless if the injury is for permanent partial or permanent total disability benefits.

Id. at 737. 

           As an interesting aside, though, it is curious that the Court allowed the seemingly irrational result of not using the 260 cap as a percentage multiplier or “schedule” for lack of a better term for permanent partial disability injuries to workers over age sixty instead of 400 weeks.  For instance, fifty percent (50%) disability would be 130 weeks instead of 200 weeks.  This would eliminate the result where an employee with 90% disability gets the same disability benefit as an employee with 65% disability. 

            The Court in McCoy dealt also with the issue of how much of an offset is the employer entitled to receive.  Mr. McCoy argued that the employer was only entitled to contributions made by T.T.C. not the total amount of all employer contributions.  Id.  The Court in a strict constructionist mode held the offset of one-half of the total amount of old age insurance benefits applies to all contributions by all employers that the employee is entitled to receive from. 

            The applicability of the holding in McCoy was challenged in Amos v. Atlas Van Lines, 2007 Tenn. LEXIS 797 (Tenn. Workers Comp. Panel).  In Amos, the employee relied on Scales (discussed below) to argue that an employer is not entitled to a set off if it has made no social security contributions on the employee’s behalf.  The Special Panel rejected this argument and agreed with the employer.  The Special Panel held that under the plain language of the statute the employee’s current employer is entitled to a set-off for the portion of the employee’s social security benefits attributable to the contributions of all his or her previous employers, regardless of the employer’s contribution.     

            In Berger v. Lear Seating Corp., the Special Panel held that it is the employer/insurer’s burden of proof on the amount of old age Social Security offset, if any.  Berger v. Lear Seating Corp., 1998 Tenn. LEXIS 548, *26 (Tenn. Workers Comp. Panel).

            In Scales v. City of Oak Ridge, et al., 53 S.W.3d 649 (Tenn. 2001), the Court was faced with the issue of whether the old age offset applies when the injured worker is receiving old age Social Security benefits off of a spouse’s earnings.  In that case, Ms. Scales was an injured employee of the City of Oak Ridge who had been receiving social security benefits under her deceased husband’s account because those benefits were more generous than her own would have been.  Id. at 653.  Oak Ridge argued it was entitled to an offset because the employee was enjoying the benefits of social security payments.  Id.  The Supreme Court held that the statute expressly states requires that the benefits be “attributable to employer contributions” for the injured employee for the offset to occur.  Id. at 654.  Thus, Ms. Scales’ award was left untouched.

            The Court in Scales went into detail about statutory construction quoting “’ [a] basic rule of statutory construction is that the legislature is presumed to use each word in a statute deliberately, and that the use of each word conveys some intent and has a specific meaning and purpose.’”  Id. quoting and referring to Bryant v. Genco Stamping & Mfg. Co., 33 S.W.3d 761, 765 (Tenn. 2000); Mooney v. Sneed, 30 S.W.3d 304, 307 (Tenn. 2000). 

Question:  If this edict of statutory construction is followed, then why should this entire statutory section apply to anything but permanent and total disability cases?

            In Tucker v. Foamex, L.P., 31 S.W.3d 241 (Tenn. 2000), the Court recognized that irrational results could occur for severely injured workers who are injured near, but not over, age sixty who might get benefits past age sixty-five if found permanently and partially disabled, but would only get benefits to age sixty-five if found permanently and totally disabled.  However, the Court chose not to apply the 260 week cap and, presumably, included offset language to injuries occurring to workers younger than sixty.

            In Galloway v. Liberty Mutual Ins. Co., 137 S.W.3d 568 (Tenn. 2004) the Court reiterated that the date of the injury, not MMI, is controlling for purposes of this statute section.  Id. at 570-1.

            In Union Bank & Trust Co. v. Boles, 2001 Tenn. Lexis 379, the Special Panel held that the Second Injury Fund can enjoy the benefits of the old age offset.

            The Court in Correll v. E.I. Dupont De Nemours & Co., 207 S.W.3d (Tenn. 2006) extended the offset to encompass spousal death benefits, but it has been expressly overruled by an amendment to the statute effective June 11, 2007.

            So in summary, the old age Social Security offset:

            1.         Applies to PTD and PPD whole body cases;

            2.         Does not apply to PPD scheduled member cases;

            3.         Injury must occur at age 60 or after;

            4.         Second Injury Fund can enjoy the benefits of the offset;

            5.         No longer applies to spousal death benefits;

            6.         Does not apply if the old age Social Security money is being drawn off of a spouse’s earnings.

If you need more information about a personal injury matter (car wreck, boating accident, slip and fall, etc.), Social Security Disability or SSI matter, or a workers compensation matter, please contact John Dreiser at the Law Offices of Tony Farmer and John Dreiser for a free case evaluation.  We can be reached at (865) 584-1211 or (800) 806-4611 or by e-mail at John@farmerdreiser.com, through Facebook,  or through our website at www.farmerdreiser.com.  Our office handles claims throughout East Tennessee, including Knoxville, ChattanoogaKingsport, Bristol, Johnson City, Morristown, Maryville, Rogersville, Dandridge, Tazewell, New Tazewell, Jefferson City, Strawberry Plains, Sevierville, Gatlinburg, Loudon, Kingston, Halls, Maynardville, Crossville, Cookeville, Sweetwater, Lenoir City, Athens, Oak Ridge, Clinton, LaFollette, Lake City, Jacksboro, Bean Station, Cosby, Newport, White Pine, Mosheim, Wartburg, Sunbright, Pigeon Forge, and Deer Lodge.

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About farmerdreiser

Based in Knoxville, Tennessee, The Law Offices of Tony Farmer and John Dreiser provide comprehensive representation to injured victims throughout eastern Tennessee in personal injury, Social Security disability, and workers' compensation cases.
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