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Social Security Offsets in Tennessee Workers’ Compensation

By: Lauren Ray Hall, Associate, Tennessee

I recently handled a claim involving Social Security benefits in a Tennessee workers’ compensation case that, while unusual, raises an interesting question regarding a potential offset. In this case, the employee settled the Permanent Partial Disability (“PPD”) portion of his workers’ compensation claim and, after failing to return to work at the same or greater wage at the expiration of his Initial Compensation Period, the employee filed a Petition for Benefit Determination with the Tennessee Bureau of Workers’ Compensation seeking increased workers’ compensation benefits through application of the statutory multipliers. The interesting part here was that, while the employee was not receiving Social Security benefits at the time of the original PPD settlement, he began receiving Social Security Retirement Income in the time that lapsed between the PPD settlement and the expiration of the Initial Compensation Period, at which time the employee became eligible for additional statutory enhancements.

The question arose as to whether the workers’ compensation insurance carrier would be entitled to the benefits of the “Social Security Offset,” as provided for in T.C.A. § 50-6-207(4)(A)(i). This states that, “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.” If the Offset was applied, the carrier would then be entitled to a reduced compensation rate when calculating the monetary value of the additional statutory enhancements. This argument is supported by the premise that the additional weeks of compensation awarded as a result of the application of the statutory enhancements are intended to compensate the employee for the vocational disability suffered from the date of the expiration of the initial compensation period, forward, during which time the employee would also be receiving Social Security benefits.

Unfortunately, the case did not progress to the point where I received a ruling on this particular issue, but the factual scenario that is not so extraordinary I expect will never come up again. Until then, we wait.