Punished for Having a Work Injury?

Offsets against Workers’ Compensation benefits are not new in Pennsylvania. For years, employer have enjoyed a credit for an injured workers receipt of benefits such as sickness & accident or short-term disability. Since the 1996 changes to the Act, however, the Commonwealth has expanded credits much to the detriment of the injured worker.

Section 204(a) of the Act provides for a credit against a Claimant’s workers’ compensation benefits for 50% of Social Security “old age benefits,” severance pay, and pension benefits to the extent that they are funded by the employer. Doubtless these offsets bring cost savings to Pennsylvania employers, but they hurt injured workers – people who didn’t ask to be injured at work.

This article addresses the offset for social security retirement benefits. We will address the credit for severance and pension benefits in future articles.

Suffering a long-term work injury can destroy an individual’s retirement savings plan. While a Claimant is out of work and receiving compensation, no contributions are being made to his Social Security account. Combine this with a substantial reduction in income and the potential loss of health insurance and other benefits, and an injured worker can find it very difficult to meet day-to-day expenses. Because of this, setting aside extra money for retirement needs becomes virtually impossible.

Unlike allowing a credit for employer funded sickness and accident benefits, social security retirement benefits are an earned benefit paid for in significant part by an employee’s contribution over his entire working life. By allowing an employer a credit against such “old age” benefits, the Act is allowing a current employer credit for work performed by the employee for all prior employers and deprives an injured worker of benefits for which all of his prior work efforts were taxed to accumulate. The result is that employees who are injured at work receive less of their Social Security “old age” benefits than employees who are fortunate enough to reach retirement age without suffering such an injury

An injured Pennsylvania employee should be entitled to no less employment related benefits than a Pennsylvania worker who has suffered no work injury. Act 57’s new credits should be legislatively withdrawn. To allow otherwise not only punishes workers who are unfortunate enough to suffer an injury while in the service of their employer, but sets them up for financial hardship during the time in their life when finances are generally already stretched to the limit. While these credits may save Pennsylvania employers money in the short-run, in the long run the employees hurt by these harsh provisions may even have to turn to Federal and State social welfare programs for financial assistance.

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