Conflict of Social Security Benefits and Workers' Compensation

The intersection of workers’ compensation and social security benefits often presents challenges for injured workers. The Court of Appeals of Washington reviewed a case highlighting this issue: Margaret West and Harold Long v. the Department of Labor and Industries.  

It examined whether the Department of Labor and Industries (DLI) could reduce workers’ compensation disability benefits by the amount of social security retirement benefits received by an injured worker. The dispute centered around RCW 51.32.225, a Washington statute authorizing such offsets, and whether this state law conflicts with federal statutes. For those navigating similar legal challenges, our experienced attorneys can provide valuable guidance.

Case Background

Margaret West and Harold Long each sustained work-related injuries that entitled them to workers’ compensation benefits. West, injured in March 2018 at the age of 63, began receiving time-loss compensation benefits through DLI. However, once she qualified for social security retirement benefits in July 2019, DLI reduced her workers’ compensation benefits by the amount of her social security payments. This adjustment resulted in an overpayment of $4,544.80, which DLI sought to recover.  

Similarly, Harold Long was injured in 2012 at age 61 and also began receiving workers’ compensation benefits. When Long became eligible for social security retirement benefits in 2017, DLI applied the same offset and assessed an overpayment of $13,073.40. Both West and Long protested these reductions, ultimately appealing to the Board of Industrial Insurance Appeals (BIIA) and later to the courts.  

The Dispute  

The core issue before the courts was whether RCW 51.32.225 is preempted by 42 U.S.C. § 424a, a federal statute governing offsets for social security benefits. Federal law authorizes offsets for social security disability benefits, but does not explicitly mention retirement benefits. West and Long argued that the omission of retirement benefits in the federal statute invalidates Washington’s offset provision.

DLI maintained that the state law is consistent with federal objectives, ensuring that benefits are coordinated to avoid duplication. This principle, commonly referred to as a “reverse offset,” allows states to deduct social security benefits from workers’ compensation payments to maintain equitable compensation levels.

Court Decisions and Appeals  

West and Long’s initial protests were denied by DLI, leading to consolidated appeals before the BIIA. The BIIA ruled in favor of DLI, upholding its authority to reduce workers’ compensation benefits based on RCW 51.32.225. The decision was subsequently affirmed by the Pierce County Superior Court, prompting West and Long to take their case to the Washington Court of Appeals.  

The Court of Appeals conducted a de novo review of the issues, focusing on federal preemption. Under the Supremacy Clause of the U.S. Constitution, federal law supersedes state law only when Congress has shown clear intent to occupy a legal field entirely or when state law conflicts directly with federal objectives. The appellate court found no evidence that Congress intended to preempt state law in this instance.  

The court further noted that the reverse offset provision in RCW 51.32.225 aligns with federal policies aimed at preventing duplicate benefits. Additionally, it emphasized that while 42 U.S.C. § 424a specifically addresses disability benefits, its silence on retirement benefits does not imply preemption.  

Impact of Federal Amendments  

West and Long also argued that the 2000 Senior Citizens' Freedom to Work Act, which eliminated earnings limits for individuals receiving social security retirement benefits, undermined the validity of RCW 51.32.225. They claimed that the state law’s offset provision conflicted with this federal amendment.  

The appellate court rejected this argument, clarifying that the 2000 amendment addresses income limits for retirees but does not regulate offsets between workers’ compensation and social security benefits. The statutes serve distinct purposes and do not conflict.  

Conclusion  

The Washington Court of Appeals upheld the legality of RCW 51.32.225, affirming DLI’s authority to reduce workers’ compensation benefits by the amount of social security retirement benefits. This decision underscores the importance of understanding how state and federal laws interact in benefit coordination. At Whitcomb Selinsky PC, we are here to provide the expertise you need to navigate these challenges successfully.  

If you have questions about workers’ compensation or social security offsets, don’t hesitate to reach out to our team for personalized guidance.