The National Council of Social Security Management Associations (NCSSMA), an organization of Social Security management personnel, has been kind enough to send me a copy of their draft position paper on simplifying the workers compensation offset which is applied when a claimant receives both Social Security Disability Insurance Benefits and workers compensation at the same time. I've posted their position paper on the Social Security Perspectives blog (which I rarely use).
I think everyone who has to deal with the workers compensation offset wishes it could be made simpler but, so far, there's been no consensus on how to do that. NCSSMA recommends either simplifying the offset by applying a uniform offset amount regardless of the amount of workers compensation benefits paid or somehow forcing reverse offsets on the states.
Applying a uniform offset amount would simplify matters some but it still leaves plenty of complexity. In some cases, Disability Insurance Benefits will be reduced by considerably more than the claimant is receiving in workers compensation. Probably the biggest problem is how to apply a uniform offset when a claimant receives a lump sum settlement of workers compensation benefits. Current law allows lump sum payments to be considered as spread over the claimant's remaining life expectancy. This has been a bit controversial but if the lump sum payment is for the claimant's disability over the claimant's remaining life expectancy what's wrong with spreading the lump sum amount over the remaining life expectancy? However, applying a flat rate reduction for the rest of a claimant's entire life would clearly be unfair.
Some states now reduce workers compensation benefits as a result of the receipt of Disability Insurance Benefits. Social Security does not apply an offset when the state has applied an offset. Current law limits the reverse offset to 15 states who had a reverse offset before a certain date in the past. This limitation could be removed but there is no way to force states to implement reverse offsets. Also, the NCSSMA plan would require a reverse offset for public disability benefits. That's applied to foreign social security benefits under contributory plans so you'd need to get every country in the world with a contributory social security scheme to adopt a reverse offset to eliminate thatt offset. Nationwide reverse offsets would cost the Disability Insurance Trust Fund a fair amount of money. International reverse offset would cost a little more. I'm pretty sure the reverse offset idea is going nowhere.
"Current law limits the reverse offset to 15 states who had a reverse offset before a certain date in the past. This limitation could be removed but there is no way to force states to implement reverse offsets."
ReplyDeleteCould someone please explain to me why a state would not want a reverse offset?
Without the offset, employers in the state have to pay more total workers compensation which, in turn, leads to higher premiums for workers comp insurance. Why would a state not want Social Security to shoulder some of the burden for workers comp payments? It seems illogical but 35 states opted for that. What am I missing here?
Considering most disabled workers receive little to nothing for their injuries and that most selfinsured employers have been paying about the same in premiums, it is wrong that the employers get away with not paying on an injury that caused a disability. Offsets result in the injured/ill disabled worker to receive about 1/3rd of what they should get under worker's comp. Let us remember that social security should be in addition to and not be paying for all what employers should be paying but actually get away without paying. The SSA was to pay for our retirement not as the only payment in a worker disability. How much has gone out in the last 3 decades that the SSA paying for what employer's haven't? Was the intent of SSDI supposed to pay for employer's financial responsibilities. That SSDI disabled employees paid for out of only their FICA and or under THE SSI , EMPLOYERS PAY WHAT? for total disability created by the job? Employers got off cheap with paying little to no comp benefits or their share of SSA FICA benefits and the disabled worker gets cheated twice with this rigged system. Offsets are just more minuses for the disabled worker while employers pay out little to nothing. and employers win over and over again as usual.Employers 100, EMPLOYEES 0
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