Social Security Offset of Workers' Comp Unconstitutional

April 28, 2009 ( - The Utah Supreme Court has found that Utah law requiring the amount of workers' compensation benefits to be reduced by Social Security benefits the disabled worker receives violates the Utah state and U.S. constitutions.

In its opinion, the court said that although creating a solvent insurance fund and preventing the duplication of disability benefits are legitimate legislative objectives for the offset law, it does not believe that reducing the workers’ compensation benefits of individuals age sixty-five and older who qualify for social security retirement benefits reasonably achieves those objectives. “The purposes of workers’ compensation and social security retirement benefits are not the same, and neither can legitimately serve as a substitute for the other,” the opinion says.

With the offset provision, “the legislature has singled out injured individuals who have contributed to the economy by working the required number of years to qualify for social security retirement benefits, and punished them by reducing their workers’ compensation benefits,” the court ruled.

Nathan H. Merrill objected to a provision in Utah’s code that provides an offset reducing the amount of benefits for individuals receiving both workers’ compensation benefits and social security retirement benefits. Specifically, when an individual qualifies for both social security retirement benefits and workers’ compensation benefits, and when the individual has received 312 weeks of workers’ compensation, workers’ compensation benefits are reduced by 50% of the amount the individual is receiving in social security retirement benefits.

Merrill was injured while working for Vermax of Florida, Inc., dba Dakota Cabinets (Dakota). The Utah Labor Commission determined that Merrill had become permanently and totally disabled and was unable to find other employment. It originally ordered that Merrill receive workers’ compensation payments of $395 per week, plus other statutorily prescribed payments to be determined, but Dakota challenged the $395 award, arguing that it needed to be offset pursuant to the Utah law.

An appeals court found the offset to be reasonable, but the state high court reversed that decision, finding that the offset provision violates both the uniform operation of laws provision of the Utah Constitution and the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution.

The opinion in Nathan H. Merrill v. Utah Labor Commission, is here .