What can be Deducted when Calculating SSDI Offset:

Claimant was awarded permanent partial disability benefits. Claimant later applied for and was awarded Social Security disability benefits. Employer sought an order to offset the workers’ compensation benefits paid by Employer in the amount of $115.52 per week, pursuant to La. R.S. 23:1225(A). Claimant did not dispute Employer’s entitlement to an offset.  However, she contended that Employer should deduct the court approved attorney fees of $65.81 per week. The workers’ compensation judge agreed with Claimant and ordered an offset of $49.71 per week. Employer appealed.

Pursuant to 42 U.S.C. § 424(a), any month an individual, prior to the month in which they attain retirement age, receives social security disability benefits, as well as state workers’ compensation benefits, the federal benefit must be reduced in order that the combined benefits do not exceed eighty percent of the claimant’s pre-disability earnings.   An exception was provided in subsection (d) which allows states to reverse the offset scheme, thereby permitting a claimant to collect the entire amount of the Social Security disability benefits and only part of the state benefits necessary to bring the total benefits up to the eighty percent amount. La. R.S. 23:1225 was passed by the Louisiana legislature to take advantage of the exception.   The dispute here is whether the 20% attorney fee should be subtracted from the offset. The court found that there is no provision in Louisiana law that requires an employer to pay attorney fees to a claimant for legal expenses incurred in connection with a claim for workers’ compensation benefits unless it is punitive in nature. Here, the fees Claimant owes to her attorney are to be paid from the disability benefits she receives from Employer, not in addition to the benefits paid to her. The judgment of the workers’ compensation court was reversed and Employer was awarded the full offset sought.

Nitcher v. Northshore Regional Medical Center (La. App. 1 Cir. 2015)