Opinion ID: 402610
Heading Depth: 1
Heading Rank: 2

Heading: The Application of the Federal Offset

Text: 11 In essence, the district court concluded that § 224(d) prohibits reduction of federal benefits where the workers' compensation plan allows reduction of the compensation during any of the time that an employee is entitled to disability benefits. It accepted the recommendation of a magistrate, who reported that the court should follow the decision in Tarver v. Califano, Civ. No. 76-969 (M.D.Fla. Sept. 12, 1977). Tarver had held: 12 the phrase provides for in the context of Section 224(d) of the Social Security Act and in the context of ordinary usage means that there is such a law in existence. Whether the statute is mandatory or permissive makes no difference. A law provides for the reduction of benefits when there is in existence a statute pursuant to which a reduction may be made, regardless of whether the reduction is actually made. (Emphasis added.) 13 The appellees, of course, support this interpretation. They argue that § 224(d) is categorical in its application since it does not address when the workers' compensation law must provide for the reduction of benefits or the amount of reduction that must be provided. 14 The appellees contend that the language of § 224(d) is unambiguous, so that there is no need to inspect the legislative history to determine the intent of Congress. Covering all bases, however, they contend that the legislative history supports their view. They argue that Congress was worried about the impact of the social security disability program on the workmen's compensation systems of the states. In their view, the purpose of § 224(d) is to secure to the states the economic benefits of reduced compensation payments when concurrent entitlement to disability benefits exists. Rather than requiring the Social Security Administration to monitor the payment of workmen's compensation benefits, they argue, Congress created a more expedient solution in which the Administration is only required to look to the law under which the compensation is paid to see if any offset exists. 15 We disagree with the reasoning offered by the appellees and reject the interpretation adopted by the district court. The offset exception must be read in its entirety. It excepts a compensation law or plan that provides for a reduction when anyone is entitled to social security benefits. Prior to adjudication and the subsequent receipt of disability payments, a proper claimant is entitled to benefits even though they are not being received. Thus, to the extent that Florida law does not reduce workers' compensation until the receipt of social security benefits, it cannot be said that the state's plan provides for a reduction so as to make § 224(d) of the Act applicable. 2 To the contrary, in such circumstances the offset of § 224(a) of the Act must apply. 16 Moreover, the statute must be considered as a whole, and the exception to the offset provision must be read in light of the purpose of the Act. See generally, C. Sands, 2A Statutes and Statutory Construction § 46.05 (4th ed. 1973). This broader analysis confirms the interpretation urged by the Secretary. 3 17 (I)t is clear from the legislative history that the purpose of (§ 224(a) ) is to prevent the payment of excessive combined benefits. Kananen v. Matthews, 555 F.2d 667, 670 (8th Cir. 1977) (citing S.Rep. 404, 89th Cong., 1st Sess., reprinted in (1965) U.S.Code Cong. & Ad.News 1943, 2040). Such payment was thought to cause two evils: first, it reduced a worker's incentive to return to the work place and hence impeded rehabilitative efforts; and second, it created fears that the duplication of benefits would lead to an erosion of state workers' compensation programs. Freeman v. Harris, 625 F.2d 1303, 1306 (5th Cir. 1980); accord, Richardson v. Belcher, 404 U.S. 78, 83, 92 S.Ct. 254, 258, 30 L.Ed.2d 231 (1971). The interpretation of the district court here allows the very result Congress acted to prevent in § 224: the receipt of duplicative state and federal benefits. 18 The purpose of the § 224(d) offset exception in the scheme created by Congress seems only to have been the prevention of a double offset, so that federal and state plans would not both offset the benefits that were provided by each other. The Secretary's interpretation is consistent with that goal. Even if the offset exception was also intended to secure the states the economic benefits of reduced compensation payments, the Secretary's view is not incongruous.