SSR 74-21c: SECTION 224(a) (42 U.S.C. 424(a)). -- DISABILITY INSURANCE BENEFITS -- REDUCTION FOR RECEIPT OF STATE WORKMEN'S COMPENSATION PAYMENTS -- "SPECIFIC LOSS" BENEFIT UNDER MICHIGAN STATUTE

20 CFR 404.408

SSR 74-21c

Grant v. Weinberger , 482 F.2d 1290 (6th Cir., 1973)

PER CURIAM: Appellant, Secretary of Health, Education and Welfare,

appeals from the grant of full Social Security disability benefits by the

United States District Court for the Western District of Michigan,

Southern Division.

This case is an extension of the debate previously joined in Lofty v.

Richardson , 440 F.2d 1144 (6th Cir.), cert. denied , 404 U.S.

985 (1971), and ultimately decided in Richardson v. Belcher , 404

U.S. 78 (1971). These cases concerned a due process attack upon 42 U.S.C.

§ 424(a) (1970), wherein Congress provided an offset against Social

Security disability payments of the amount of any payments for disability

then being made under a state workmen's compensation plan.

In the instant case plaintiff Grant suffered the amputation of his arm in

the course of his employment at the Lakey Foundry Corporation. The

employer paid the sums provided by the Michigan Workmen's Compensation Act

( see M.S.A. 17.237 (361) (Cum. Supp. 1972)). This provision

provides in part that the "disability . . . shall be deemed to continue

for the period specified. . . ." ". . . arms, 269 weeks . . ." (M.S.A.

17.237 (361) (i) (Cum. Supp. 1972)).

The administrative decision and that of the Hearing Examiner and the

appeals council was that the payments provided for the loss of the arm

must be offset against Social Security disability payments. On petition to

review that decision before the District Judge, the Judge recognized that Richardson v. Belcher, supra, and Lofty v. Richardson , supra, were

controlling on the constitutional issue pertaining to due process, but

held that Michigan case law, particularly Jones v. Cutler Oil Co. ,

356 Mich

d for the loss of the arm

must be offset against Social Security disability payments. On petition to

review that decision before the District Judge, the Judge recognized that Richardson v. Belcher, supra, and Lofty v. Richardson , supra, were

controlling on the constitutional issue pertaining to due process, but

held that Michigan case law, particularly Jones v. Cutler Oil Co. ,

356 Mich. 487 (1959), demonstrated that specific loss benefits under the

Michigan Workmen's Compensation statute are not dependent upon actual (as

opposed to presumed) disability, but really amount to arbitrarily

determined amounts paid for the loss of a specific portion of the body. See Magreta v. Ambassador Steel Co. , 378 Mich. 689 (1967).

The decision of this court in Lofty, supra , and that of the

Supreme Court in Richardson ( Belcher ), supra , apply

an arguably harsh result because it seemed obvious to the courts concerned

that Congress intended the offset and that its legislative decision was

well within its legislative powers. In this case the harshness of the

Congressional enactment is even further illustrated. The loss is permanent

and in the instance of this totally disabled plaintiff, it will not result

in any benefit at all in excess of what he would have received (without

Workmen's Compensation) from Social Security total disability benefits

alone.

The purpose of the offset amendment, as well as its method of operation,

seems plain to us from the face of the statute:

42 U.S.C. § 424a. (1970).

We note, of course, the District Judge's reliance upon state law holdings

that under the Michigan Compensation law specific benefits are not

dependent upon proof of incapacity for work. See Magreta v. Ambassador

Steel Co. , 378 Mich. 689, 696 (1967). This fact, however, does not

serve to remove these benefits from the Michigan Workmen's Compensation

plan or to demonstrate any Congressional intent to exclude them under §

424a.

reliance upon state law holdings

that under the Michigan Compensation law specific benefits are not

dependent upon proof of incapacity for work. See Magreta v. Ambassador

Steel Co. , 378 Mich. 689, 696 (1967). This fact, however, does not

serve to remove these benefits from the Michigan Workmen's Compensation

plan or to demonstrate any Congressional intent to exclude them under §

424a.

Since the benefits for specific loss which are the subject of this

dispute are provided for the months concerned "under a workmen's

compensation law or plan . . . of . . . a State" the offset mandated by

the statute must be given effect. Richardson v. Belcher, supra at

84.

The judgment of the District Court is reversed and the case is remanded

for entry of judgment in favor of the Secretary.