SSR 71-34c: SECTION 224(a). -- DISABILITY INSURANCE BENEFITS -- REDUCTION FOR RECEIPT OF WORKMEN'S COMPENSATION -- LONGSHOREMEN'S AND HARBOR WORKER'S COMPENSATION ACT

20 CFR 404.408

SSR 71-34c

Ladner v. Secretary , 304 F.Supp. 475 (U.S.D.C., S.D. Miss.,

1969)

NIXON, District Judge: This is a suit brought pursuant to section

205(g) of the Social Security Act, 42 U.S.C. 405(g), by Hubert F. Ladner

(hereinafter referred to as Claimant) to review a final decision of the

Secretary on September 20, 1968. The Hearing Examiner determined that

Claimant's disability insurance benefits were subject to offset deductions

under section 224 of the Act, 42 U.S.C. 424a. This decision was held to be

correct by the Appeals Council and thus subject to review by this

Court.

The operative facts are as follows. Claimant is 47 years old, married,

and has six children, four of whom are under 18 years of age. He is a high

school graduate with two years of college credits. He was discharged from

the Army in 1945 with a pension for 20 percent disability due to a back

injury and mental condition. This pension has since been raised to total

disability in the amount of $119.00 monthly. On November 12, 1965,

Claimant injured his knee while employed at Ingalls Shipyard. This injury

rendered him unable to walk and required periodic drainage. In March of

1966, a cartilage was removed from the knee but the operation was

unsuccessful. Later in 1966, a patellectomy was performed but this still

led to little improvement. A complete knee fusion has been recommended but

there has been no arthrodesis as Claimant's condition is complicated by

chronic thrombophlebitis in the right leg.

From March 2, 1966 to February 7, 1967, Claimant received temporary total

disability payments of $70.00 per week totaling $3,430.00. Thereafter, it

was determined that Claimant had lost 52.5 per centum use of his right

leg. Title 33, U.S.C. 908(e) of the Longshoremen's and Harbor Workers

Compensation Act provides:

* * * * * * *

* * * * * * *

chronic thrombophlebitis in the right leg.

From March 2, 1966 to February 7, 1967, Claimant received temporary total

disability payments of $70.00 per week totaling $3,430.00. Thereafter, it

was determined that Claimant had lost 52.5 per centum use of his right

leg. Title 33, U.S.C. 908(e) of the Longshoremen's and Harbor Workers

Compensation Act provides:

* * * * * * *

* * * * * * *

Thus, under this schedule, Claimant became entitled to 151.2 weeks'

compensation (52.5% of 288 weeks) totaling $10,584.00. Beginning February

8, 1967, claimant was paid 55 4/5 weeks' compensation at $70.00 per week

and on November 11, 1967, he received, upon his application, a lump sum

payment for the balance of the 151.2 weeks.

Pursuant to section 223 of the Social Security Act, 42 U.S.C. 423,

Claimant, having established a period of disability beginning March 2,

1967, was awarded disability insurance benefits for himself and family.

These benefits, however, were subsequently reduced upon the determination

that he was also receiving workmen's compensation benefits. This offset

was made under the provisions of section 224 of the Social Security Act,

42 U.S.C. 424(a) and (b) which provides:

The correctness of the amount by which Claimant's Social Security

benefits were reduced is not questioned. The sole issue before this Court

is whether or not the reduction provisions of section 224 should be

applied against the Claimant herein.

ensation benefits. This offset

was made under the provisions of section 224 of the Social Security Act,

42 U.S.C. 424(a) and (b) which provides:

The correctness of the amount by which Claimant's Social Security

benefits were reduced is not questioned. The sole issue before this Court

is whether or not the reduction provisions of section 224 should be

applied against the Claimant herein.

Claimant first contends that when a scheduled injury under section 908(c)

of the Longshoremen's and Harbor Workers' Compensation Act is established,

the offset provision should not apply. The payments for permanent partial

disability under this schedule, Claimant asserts, were for the loss of use

of his right leg and would have been made regardless of any loss of

earning power. This same view is expressed by the Assistant Deputy

Commissioner, United States Department of Labor, in a letter concerning

Claimant's request for a lump sum award (Exhibit 16a). In this same line,

Claimant suggests a distinction between a claim based upon a loss under

the Longshoremen's Act (loss of a scheduled member) and a claim based upon

the same loss under the Social Security Act (inability to engage in

substantial gainful activity), the test for each being quite dissimilar.

While it is true that the loss of earning capacity should not be

considered in determining that a particular impairment falls within the

schedule and in the resulting entitlement to compensation, such a

determination does in fact establish a loss of earning capacity.

r the Social Security Act (inability to engage in

substantial gainful activity), the test for each being quite dissimilar.

While it is true that the loss of earning capacity should not be

considered in determining that a particular impairment falls within the

schedule and in the resulting entitlement to compensation, such a

determination does in fact establish a loss of earning capacity.

The extent of the loss of earning capacity is therefore limited by the

amount specified in the schedule. Williams v. Donovan , 234 F.Supp.

135 (1964), 367 F.2d 825 (C.A. 5 1966). Thus, the term disability, as

defined by 902(10) of the Longshoremen's Act to mean "incapacity because

of injury to earn the wages which employee was receiving at the time of

injury. . . .", is applicable to both scheduled as well as other

compensation benefits under the Act. In light of the foregoing, Claimant's

further contention as to the dissimilarity of test under the two Acts is

without merit, the reason for disability payments under both being

substantially the same. The language of section 224(a)(2) of the Social

Security Act is clear. If an individual is entitled to "periodic benefits

for total or partial disability (whether or not permanent)" "under a

workmen's compensation law or plan of the United States or a State", then

Social Security payments shall be reduced accordingly. Claimant herein is

entitled to permanent partial disability payments for a 52.5% loss of use

of his right leg under the Longshoremen's Act, a workmen's compensation

plan of the United States. The determination that a particular impairment

falls within the schedule provided for in section 908(c) of the

Longshoremen's Act does not prevent the application of the offset

provisions of section 224(a) of the Social Security Act.

anent partial disability payments for a 52.5% loss of use

of his right leg under the Longshoremen's Act, a workmen's compensation

plan of the United States. The determination that a particular impairment

falls within the schedule provided for in section 908(c) of the

Longshoremen's Act does not prevent the application of the offset

provisions of section 224(a) of the Social Security Act.

On November 11, 1967, Claimant, upon his application, received a lump sum

payment of $6,694 representing the balance of the total amount due under

the schedule for permanent partial disability payments of $70.00 per week

for a period of 151.2 weeks. This award was made pursuant to section

914(j) of the Longshoremen's Act which provides:

It is the contention of the Claimant that this award falls within the

exclusion contained in section 224(b) which provides that:

Claimant's contention is without merit. The lump sum award was without

any doubt a commutation or a substitute for the permanent partial

disability payments of $70.00 per week. The employer's liability to

compensation claimant for his disability was properly discharged by this

payment representing the balance on 151.2 weeks of compensation due.

(Exhibit 22) Claimant questions when, if not in the situation under

consideration, a lump sum payment would be excluded from the reduction

provision. An examination of the purpose of this section provides the

answer to this query:

's liability to

compensation claimant for his disability was properly discharged by this

payment representing the balance on 151.2 weeks of compensation due.

(Exhibit 22) Claimant questions when, if not in the situation under

consideration, a lump sum payment would be excluded from the reduction

provision. An examination of the purpose of this section provides the

answer to this query:

Case authority in this particular area is minimal to say the least. The

Defendant, Secretary, cites only two related cases while the Claimant

presents none. Although the cases cited by the Defendant dealt with

reductions due to the receipt of state workmen's compensation benefits,

both held in effect that the lump sum payment was to be regarded as

replacing the periodic payments and the offset should continue

periodically for that period of time represented by the lump sum award. Walters v. Flemming , 185 F.Supp. 288 (D.C. Mass., 1960); Knapczyk v. Ribicoff , 201 F.Supp. 283 (N.D. Ill., 1962).

After a careful review of the record and the briefs of both parties,

including the cases and authority cited therein, this Court is of the

opinion that the findings made by the Secretary are supported by

substantial evidence and the Secretary applied the proper legal standards.

The decision of the Secretary is affirmed and his Motion for Summary

Judgment is granted.

A judgment accordingly shall be presented to the Court.