Opinion
W.C. No. 4-755-808.
January 14, 2011.
ORDER
The respondents seek review of an order of Administrative Law Judge Felter (ALJ) dated August 2, 2010 that denied and dismissed any and all claims for an offset against permanent total disability (PTD) benefits owed to the claimant. We set aside the order and remand for entry of a new order granting the offset requested by the respondents.
The following facts do not appear to be disputed. The claimant suffered an industrial injury on April 2, 2008. The claimant was entitled to PTD benefits as a result of the injury. At the time of the injury the claimant was 65 years old. The claimant received federal social security widow's survivor benefits, following the death of her husband. The claimant began receiving these social security survivor benefits in July 2004, before her 2008 industrial accident.
The ALJ determined that the respondents had not sustained their burden of proving entitlement to any offset because the General Assembly, in providing for offsets, only intended to avoid a duplication of benefits where the source of federal benefits sought to be offset emanated from a work-related injury or death. The ALJ found that the widow's benefits derived from the non-work related death of her late husband and were not related to "disability, death or retirement benefits." The ALJ reasoned that there was no duplication of benefits in the present case.
The ALJ further reasoned that the cases interpreting the offset provisions concern work-related disability, death and even retirement benefits in strictly limited situations where the injured person is over age 65 and not eligible for social security disability (SSDI) benefits, but only straight Social Security retirement benefits. In contrast, the ALJ noted that when an individual who is receiving PTD benefits with a SSDI offset reached age 65 and the SSDI benefits become social security retirement benefits, then the retirement benefits are no longer subject to offset.
The ALJ rejected the notion that the respondents were entitled to an offset for any benefits received from the Social Security Administration. Rather, the ALJ concluded that categories of social security benefits must be examined. The ALJ found that the claimant was not receiving SSDI or Social Security retirement benefits. Instead, the ALJ determined that the claimant was receiving periodic widow's benefits based on the non-work related death of her late husband. The ALJ found that the widow's benefits received by the claimant were not disability-based because she had attained sixty five years of age before they were awarded. The ALJ concluded that the death benefits offset did not apply.
The ALJ found that the name of the federal statute popularly referred to as the "Federal Old Age, Survivors, and Disability Insurance Act" does not mean that survivor benefits should be offset against PTD benefits. Instead, the ALJ, in detailed fashion, outlined his understanding of separate statutory provisions that control offsets for retirement, disability and death benefits.
The ALJ dismissed any and all claims for an offset on PTD benefits for federal widow's survivor benefits under § 8-42-103(1(c)(I) or (II), C.R.S. The respondents appeal contending the ALJ erred in holding that the respondents were not entitled to an offset against PTD benefits based upon the claimant's receipt of federal widow's survivor benefits. In support of the ALJ's ruling, the claimant contends she does not receive social security disability or retirement benefits. The claimant further asserts that she does not receive workers' compensation periodic death benefits as the result of the death of her husband, who died from natural causes unrelated to any work injury and, therefore, the death benefit offset is not applicable. The respondents contend that they established entitlement to an offset under § 8-42-103(1)(c)(II) C.R.S. We first consider this section of the Workers' Compensation Act (Act), but later discuss the § 8-42-103(1)(c)(I) C.R.S. and § 8-42 114.
I. Section 8-42-103(1)(c)(II)
The ALJ discussed in his order the provisions of § 8-42-103(1)(c)(II), which he characterizes as the retirement statute. It is provided in § 8-42-103(1)(c)(II) as follows:
In cases where it is determined that periodic benefits granted by the federal old-age, survivors, and disability insurance act or employer-paid retirement benefits are payable to an individual and the individual's dependents, the aggregate benefits payable for permanent total disability pursuant to this section shall be reduced, but not below zero:
(A) By an amount equal as nearly as practical to one-half such federal benefits; except that this reduction for the periodic benefits granted by the federal old-age, survivors, and disability insurance act shall not exceed the reduction specified in subparagraph (I) of this paragraph (c) for the periodic disability benefits payable to an individual;
The Federal Old-Age, Survivors and Disability Insurance Act does provide for "Widow's Insurance Benefits." See 42 U.S.C.A. § 402(e). It is clear that the claimant is receiving widow's benefits under that section of the federal act. We note that that the record contains a "Retirement, Survivors and Disability Insurance Notice of Award" from the Social Security Administration granting the claimant monthly widow's benefits in 2004. Exhibit C. In interpreting statutes, we are to give effect to the legislature's intent, and if the statutory language is clear and unambiguous, we give the words their ordinary meaning and apply the statute as written. See Cochran v. West Glenwood Springs Sanitation Dist., 223 P.3d 123, 125-26 (Colo. App. 2009). In our view, the ordinary meaning of the statute is that the widow's benefits received by the claimant here are periodic benefits granted by the Federal Old-Age Survivors and Disability Insurance Act and therefore her PTD benefits are subject to offset.
We are not persuaded by the claimant's contention that it is merely the name of the federal statute which the respondents rely upon for the offset. As noted above, in the body of the Federal Old-Age, Survivors and Disability Insurance Act, there is a provision for "Widow's Insurance Benefits" and the claimant here received such benefits.
The ALJ, citing Culver v. Ace Elec, 971 P.2d 641 (Colo. 1999), acknowledged that social security retirement benefits, occurring after 65, could be offset against PTD benefits. The ALJ, citing the court's language in Culver, determined that the prevention of duplication of benefits served a legitimate governmental purpose if the two sets of benefits being coordinated could legitimately be placed in a common pool of benefits. The ALJ concluded that the survivor benefits received by the claimant here could not legitimately be placed in a common pool of benefits. The ALJ found that the survivor benefits here did not share a wage loss purpose similar to social security disability, unemployment and social security retirement benefits. The ALJ concluded that federal Social Security survivor or widow's benefits, unrelated to a work related fatality, are not part of a wage loss protection program and are not encompassed in the offset provisions. The ALJ determined that periodic widow's benefits cannot genuinely be considered to be a "common pool of benefits" due to the distinction in the purpose of the benefit, which is to provide for a widow regardless of work-relatedness in the source of the benefits, i.e. the husband's death. Therefore, as we read the ALJ's order, he determined that the respondents were not entitled to an offset under the provisions of § 8-42-103(1)(c)(II).
However, as we read Culver v. Ace Elec, the court determined that the application of the offset provision of § 8-42-103(1)(c)(II) and (IV), of the Act reduces the periodic PTD payments otherwise payable to an injured worker who has reached the age of sixty-five and to whom, or to whose dependents, social security or employer-paid retirement benefits are also payable. Before 1989 Social Security retirement benefits could not be offset. However, the General Assembly changed the law and for injuries occurring after July 1, 1989 a claimant after the age 65 who receives social security retirement payments has an offset against PTD benefits. Colo. Sess. Laws 1989, Ch. 67 at 412; See Walters v. Pueblo Regional Center, W.C. 3-827-795 (April 11, 1991). In particular we note that the injury on which the award for PTD benefits was awarded occurred after the claimant here reached sixty-five years of age and therefore the provisions of § 8-42-103(1)(c)(II) appear to apply. See Culver v. Ace Elec, supra.
In Culver, the claimants argued that the offset operated to reduce the periodic payments otherwise payable to the injured PTD worker after the age of sixty-five when the worker was also eligible to receive social security, but only if the two sets of benefits being coordinated could legitimately be placed in a common pool of benefits. The claimants in Culver, in a similar manner to the claimant here, argued that the social security retirement benefits as "old-age entitlements" served a different purpose from disability benefits.
However, the Culver court rejected this argument determining that even if social security old age benefits are construed to be a replacement for wage loss resulting from advanced age, preventing double recovery of old age benefits and permanent total disability benefits is achieved by § 8-42-103(1)(c)(II), which deducts the value of the social security old age benefit from the award for workers' compensation benefits. The court concluded that through the offset provision, the General Assembly has chosen to place social security retirement benefits and PTD benefits into the same pool of benefits.
We see no reason to reach a different conclusion here than was reached in Culver. In Culver, the claimant began receiving social security retirement benefits prior to incurring his workplace injury. Here, the claimant received social security widow's survivor benefits following the death of her husband and before her 2008 industrial accident. We are not persuaded that the claimant's receipt of federal periodic benefits as a survivor of her husband justifies failing to follow the court's direction in Culver that the General Assembly in the Act has chosen to place benefits received under the Federal Old-Age Survivors and Disability Insurance Act and PTD benefits into the same pool of benefit and allow them to be offset.
In this context we note that in Sampson v. Weld County School Dist, 786 P.2d 488 (Colo. App. 1989), the worker sustained an industrial injury while working for an employer covered under the Public Employees Retirement Association (PERA) retirement program. The employer made contributions to PERA and was not required to pay Social Security taxes on claimant's earnings. The claimant was not "vested" in PERA at the time of the injury, but subsequently became vested. The claimant was found eligible for Social Security disability benefits attributable to his disability arising from the industrial injury. The court held that the Act allows an employer to take an offset against workers' compensation benefits for social security benefits paid to a claimant, even though employer did not pay social security taxes. The Sampson court determined that because the offset statute does not contain an explicit requirement that the offset is dependent on the employer having paid social security taxes it would decline to read such a requirement into the statute.
Here, the claimant received federal social security widow's survivor benefits following the death of her husband before her 2008 industrial accident. In the absence of a provision that the offset provisions of § 8-42-103(1)(c)(II) do not apply because the Federal benefits are derived from the non-work related death of the spouse, we decline to read such a requirement into the statute. See Sampson v. Weld County School District, supra. Therefore, in our view the ALJ erred in his determination that the respondents were not entitled to an offset under the provisions of § 8-42-103(1)(c)(II).
In our opinion the provisions of § 8-42-103(1)(c)(II) apply to the present case and entitle the respondents to an offset. However, because the ALJ and both of the parties have discussed the offset provisions found in § 8-42-103(1)(c)(1) and § 8-42-114 we discuss those provisions below.
II. Section 8-42-103(1)(c)(1)
The ALJ in his order also discussed the provisions of § 8-42-103(1)(c)(1), characterized by the ALJ as the disability statute. It is provides in § 8-42-103(1)(c)(I) as follows:
In cases where it is determined that periodic disability benefits granted by the federal "Old-Age, Survivors, and Disability Insurance Amendments of 1965", Pub.L. 89-97, are payable to an individual and the individual's dependents, the aggregate benefits payable for temporary total disability, temporary partial disability, and 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 the federal periodic benefits.
Due to her age (67) the ALJ found the claimant did not qualify for and was not receiving SSDI benefits and therefore the ALJ concluded that the respondents were not entitled to an offset. The claimant urges that the ALJ was correct in this analysis and argues that the Panel's decision in Olson v. Community Bank of Parker, W. C. No. 4-173-012 (September 29, 1997) supports the conclusion that the respondents are not entitled to an offset.
The claimant argues that the widow in Olson was between the age of 50 and 60 and under 42 U.S.C. § 423(d) a widow in that age bracket could only receive widow's benefits if she was under a disability. The claimant asserts that the respondents were entitled in Olson to an offset only because the claimant was receiving SSDI benefits and in contrast here the claimant is not receiving widow's benefits due to a disability between ages of 50-60 because she became disabled at the age of 67.
We are not persuaded by the claimant's and the ALJ's interpretation of Olson. In Olson the claimant was awarded PTD benefits in connection with an industrial injury and the claimant also received "disabled widow's benefits" under the Federal Old-Age, Survivors and Disability Insurance Act (Federal Act). In Olson, the ALJ determined that pursuant to § 8-42-103(1)(c)(I), C.R.S. the respondents were entitled to offset their liability for PTD benefits in an amount equal to fifty percent of the claimant's social security widow's benefits. In Olson, the claimant conceded that she was "granted" periodic benefits under the Federal Act, therefore the issue became whether a "widow's benefit" is a "disability" benefit within the meaning of § 8-42-103(1)(c)(I). The Panel rejected the argument that § 8-42-103(1)(c)(I) does not apply to "widow's benefits."
In Olson, the Panel discussed at some length the provisions of the federal act. We set forth portions of the Panel's discussion here. The Panel noted that 42 U.S.C.A. § 402(e) of the Federal Act provided that the surviving or divorced wife of an individual who died fully insured is entitled to "widow's insurance benefits" if the widow is at least 60 years old. A widow who is between age 50 and 60 may only receive "widow's benefits" if she is "under a disability" as defined by section 423(d). The Panel further noted that § 423(d) defines the term "disability" for purposes of social security disability insurance (SSDI) benefits The Panel concluded that, insofar as a "widow" is granted periodic social security benefits on account of a "disability" as defined by § 423(d), the widow is receiving "periodic disability benefits" within the meaning of § 8-42-103(1)(c)(I).
Here, the ALJ found that the claimant was not receiving widow's benefits due to a disability occurring between ages 50-60 and therefore the offset for widow's disability was inapplicable. Therefore, as we read the ALJ's order, he determined that under Olson the respondents were not entitled to an offset under the provisions of § 8-42-103(1)(c)(1) (disability statute).
However, as the Panel noted in Olson, 42 U.S.C.A § 402(e) provides that the surviving wife of an individual who died fully insured is entitled to "widow's insurance benefits" if the widow is at least 60 years old or a widow who is between age 50 and 60 may only receive "widow's benefits" if she is "under a disability" as defined by section 423(d). Therefore, although the claimant may not be entitled to federal benefits as a widow who suffered a disability between the ages of 50 and 60, she was, however, a widow over the age of 60 and as such was entitled to a "Retirement, Survivors and Disability Insurance Notice of Award" as was clearly granted to the claimant by the Social Security Administration for monthly widow's benefits. Exhibit C.
In our view, whether the claimant was receiving widow's benefits due to a "disability" is not determinative on whether the offset provisions of the Act apply. The offset is not limited to social security disability benefits because it also applies to old age and survivor benefits. In Stolworthy v. Clark, 952 P.2d 1198 (Colo. App. 1997), the court allowed an offset of workers' compensation benefits against social security retirement benefits, regardless of whether the claimant was eligible for social security disability benefits. Therefore, even if we agreed with the ALJ that the offset provisions under 42-103(1)(c)(1) disability statute are inapplicable to the present case, the respondents would still be entitled to an offset under § 8-42-103(1)(c)(II). We read nothing in Olson that compels a different result.
III. Section 8-42-114
The ALJ then discusses in his order the provisions of § 8-42-114, which he characterizes as the death benefits statute. It is provided in § 8-42-114 as follows:
In case of death, the dependents of the deceased entitled thereto shall receive as compensation or death benefits sixty-six and two-thirds percent of the deceased employee's average weekly wages, not to exceed a maximum of ninety-one percent of the state average weekly wage per week for accidents occurring on or after July 1, 1989, and not less than a minimum of twenty-five percent of the applicable maximum per week. In cases where it is determined that periodic death benefits granted by the federal old age, survivors, and disability insurance act or a workers' compensation act of another state or of the federal government are payable to an individual and the individual's dependents, the aggregate benefits payable for death pursuant to this section shall be reduced, but not below zero, by an amount equal to fifty percent of such periodic benefits.
The ALJ did not find § 8-42-114 to be directly applicable to this case. The ALJ found that it is only in case of a work related fatality that the federal survivor benefits and workers' compensation death benefits are duplicative and may be offset under § 8-42-114. In contrast the ALJ determined that the claimant's husband's death was unrelated to a work injury. The ALJ found that the respondents had cited no persuasive authority permitting an offset for survivor benefits under this scenario.
The ALJ reasoned that the offset provisions that diminish PTD benefits are in derogation of the underlying purposes of the Act in providing for benefits and should be strictly construed. The ALJ concluded that the offset provisions must be strictly construed because they are on the opposite side of the spectrum from the underlying beneficent purposes of the Act.
However, in L.E.L. Const. v. Goode 867 P.2d 875 (Colo. 1940) the Supreme Court of Colorado in interpreting the offset provisions of the Act did not engage in strict construction, but noted that its task in construing the statute was to discern the intent of the General Assembly. The court further noted that to ascertain intent, words and phrases should be given effect according to their plain and obvious meaning.
In his order the ALJ discussed the holding in L.E.L. Const. v. Goode. The ALJ noted that both widows in that case had received social security widow's benefits and workers' compensation death benefits because their husbands died on the job in work accidents. The ALJ observed that the court in L.E.L. Const. v. Goode determined that the mother's benefits were found to be equivalent to duplicative death benefits or part of a "common pool of benefits" and therefore the social security benefits could be offset on the dependent workers' compensation benefits. The ALJ concluded that the offset for survivor benefits outlined in L.E.L. Const. v. Goode had no applicability to the present case. Therefore, the ALJ determined that the respondents were not entitled to an offset under the provisions of § 8-42-114.
However, as we read L.E.L. Const. v. Goode the court determined that the General Assembly used the phrase "federal old age, survivors, and disability insurance act" and the use of the phrase encompasses all survivors' benefits. The court found that the General Assembly intended workers' compensation death benefits to be offset by all survivors' benefits paid to a family. The court found that the intent of the General Assembly in allowing offsets for all social security survivors' benefits was to lower the cost of providing lifetime and minimum weekly benefits, to eliminate discrepancies between families who receive both workers' compensation death benefits and social security benefits and families who receive only workers' compensation benefits, and to provide all families with an even stream of payments. Therefore we cannot agree with the ALJ or the claimant that there is no persuasive authority permitting an offset for survivor benefits.
In support of the ALJ's ruling, the claimant argues that she does not receive periodic death benefits as the result of the death of her husband who died from natural causes unrelated to any work injury and therefore the death benefit offset is not applicable. In the claimant's argument to the ALJ she in part relied upon Ihnen v. Western Forge 936 P.2d 634 (Colo.App. 1997). In Ihnen the court determined that the offset statute was applicable to a claimant who, after learning that social security disability insurance (SSDI) benefits would render her ineligible for mother's benefits that she had been receiving as result of spouse's death prior to and independent of work-related injury, subsequently withdrew her application for SSDI and obtained reinstatement of mother's benefits. The claimant argued, and the ALJ apparently accepted the argument, that the court's ruling in Ihnen implied that respondents were not entitled to an offset for unrelated social security mother's benefits. We disagree with this interpretation of Ihnen.
As we read Ihnen the court specifically determined that the statute did not contain language that limits the application of offset to cases in which the social security benefits and the workers' compensation benefits are each paid because of the work-related injury to the decedent, and the offset is made to avoid a duplication of benefits. The court noted that an inequity did result in part from the social security scheme, which did not allow the claimant to receive both mother's benefits and SSDI at the same time. The court noted that it may well be more equitable for the General Assembly to create an exception to the offset statute in circumstances when, as here, the claimant has a valid reason not to accept SSDI or does not benefit from a determination that SSDI is payable. However, the court noted it was not its function to rewrite the legislation, as the power to change the present scheme rests with the General Assembly.
In this context we note that the General Assembly has legislatively made a change relating to the social security offset provisions of the Act. The bill eliminated permanent partial disability (PPD) benefits from the types of indemnity benefits to which a SSDI offset can be applied. Colo. Sess. Laws 2010, Ch. 310 at 1457. This action was presumably taken to reduce results of the offset provisions of the Act regarding PPD benefits. However, the General Assembly chose not to change the offset provisions that affect PTD benefits as are involved in the present case. It is presumed that the legislature agreed with the broad judicial construction of the social security offset applicable to PTD benefits repeatedly made by the courts of Colorado. See Tompkins v. DeLeon, 595 P.2d 242, 197 Colo. 569(Colo. 1979)
Finally, we note that in Ihnen the court determined that § 8-42-103(1)(c)(I) does not contain language that limits the claimant's obligation to apply for SSDI or that limits the application of the offset only to circumstances in which the employer and the claimant both achieve an overall economic gain. In our view this determination is equally applicable to the offset described in § 8-42-103(1)(c)(II) and § 8-42-114. The court held that under the plain language of § 8-42-103(1)(c)(I), the employer was entitled to the offset. We are constrained by the plain language of § 8-42-103(1)(c)(I), § 8-42-103(1)(c)(II) and § 8-42-114. In contrast to the ALJ, we do not read language in any of these sections of the Act as suggesting that the respondents are not entitled to an offset. Therefore the matter must be remanded for determination of the amount of benefits due the claimant for PTD benefits with an offset as requested by the respondents.
IT IS THEREFORE ORDERED that the ALJ's order dated August 2, 2010 is set aside, and the matter is remanded for further proceedings and entry of a new order consistent with the views expressed herein.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ John Baird
______________________________ Thomas Schrant
MAUREEN J HILLERY, LITTLETON, CO, (Claimant).
THREE ACES, LLC d/b/a ACE HARDWARE, Attn: MS CYNTHIA MAHNKEN, HIGHLANDS RANCH, CO, (Employer).
PINNACOL ASSURANCE, Attn: HARVEY D FLEWELLING, ESQ., DENVER, CO, (Insurer).
BISSET LAW OFFICE, Attn: JENNIFER E. BISSET, ESQ., ENGLEWOOD, CO, (For Claimant).
RUEGSEGGER SIMONS SMITH STERN, LLC, Attn: VITO A. RACANELLI, ESQ., DENVER, CO, (For Respondents).