Jeffrey P. Gale, P.A. // Florida Workers’ Compensation SSD Offset and Attorney’s Fees

Florida workers injured in the course and scope of their employment may end up receiving simultaneously both workers’ compensation indemnity (money) benefits under Florida Statute 440.15 and Social Security Disability benefits under 42 U.S.C. s. 423. When this happens, Federal law and Florida law provide that the combined benefits shall not exceed 80 percent of the claimant’s pre-disability earnings. See 42 U.S.C. s. 424a and s. 440.15(9)(a).

The Federal law authorizes each state to enact legislation permitting employers and their workers’ compensation insurance companies (“E/C”), rather than the Social Security Administration, to take the offset. Regnier v. Department of Labor & Indus. of Wash., 110 Wash.2d 60, 749 P.2d 1299, 1300-01 (1988) (en banc). Florida has enacted such “reverse offset” legislation. See section 440.15(9), Florida Statutes.

Injured workers’ lawyers are entitled to fees for services rendered in obtaining 440.15 indemnity benefits. Where there is no basis for the E/C to pay the fees, the Judge of Compensation Claims (“JCC”) may order that the fees be withdrawn from the claimant’s periodic workers’ compensation indemnity payment.

In National Linen Service v. Tolliver, 686 So. 2nd 797 (Fla. 1st DCA 1997), the claimant was receiving both 440.15(1) permanent total disability (“PTD”) benefits and 42 U.S.C. s. 423 Social Security Disability benefits. Per court order, as described above, the claimant was paying attorney’s fees from his periodic PTD benefit. E/C was also taking an SSD offset to reduce claimant’s PTD check. In calculating the offset, E/C failed to exclude the attorney’s fees from the equation. This resulted in a larger offset than if the fee had been excluded. The calculation was challenged and the JCC ruled in claimant’s favor. The ruling was appealed. The First DCA affirmed the ruling. It held that the maximum reduction of benefits under the offset ‘”may never be greater than the federal government could have taken under its own offset statute.”‘ Burks v. Day’s Harvesting, Inc., 597 So.2d 858, 859 (Fla. 1st DCA 1992). It pointed out that the Code of Federal Regulations, 20 C.F.R. § 404.408 (1996) exempts legal fees from the amount counted for reduction. The current law, at 404.408a(5)(d), continues to allow the exemption:

(d) Items not counted for reduction. Amounts paid or incurred, or to be incurred, by the individual for medical, legal, or related expenses in connection with the claim for public disability payments (see § 404.408 (a) and (b)) or the injury or occupational disease on which the public disability award or settlement agreement is based, are excluded in computing the reduction under paragraph (a) of this section to the extent they are consonant with the applicable Federal, State, or local law or plan and reflect either the actual amount of expenses already incurred or a reasonable estimate, given the circumstances in the individual’s case, of future expenses. Any expenses not established by evidence required by the Administration or not reflecting a reasonable estimate of the individual’s actual future expenses will not be excluded. These medical, legal, or related expenses may be evidenced by the public disability award, compromise agreement, a court order, or by other evidence as the Administration may require. This other evidence may consist of:

(1) A detailed statement by the individual’s attorney, physician, or the employer’s insurance carrier; or

(2) Bills, receipts, or canceled checks; or

(3) Other clear and convincing evidence indicating the amount of expenses; or

(4) Any combination of the foregoing evidence from which the amount of expenses may be determinable.

The amount of the attorney fee is based on the pre-offset value of the indemnity benefits.

********************************