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May 7, 2019 Article

Maine WC Alert: Appellate Division Rules No Consequences Under 218 for Deferment of Receipt of Old-Age Social Security Benefits

Maine Workers' Comp Alert

In Pratt v. S.D. Warren (No. 19-3 [WCB App. Div. April 30, 2019]), S.D. Warren appealed a decision denying its Petition for Approval of Discontinuance of Incapacity Benefits. An employer may reduce incapacity benefits by 50% of the amount of social security retirement benefits received by the employee (39-A M.R.S.A. § 221(3)(A)(1)). Section 221(7) provides that compensation may be discontinued if an individual fails to apply for social security retirement benefits or provide the employer with a release of social security information (§ 221(7)). However, nothing in section 221 “may be considered to compel an employee to apply for early federal social security old-age insurance benefits or to apply for early or reduced pension or retirement benefits” (§ 221(8)). The Appellate Division rejected the argument that an employee’s obligation under § 221(4) to “make application” for social security benefits at the time the employee becomes eligible implies an obligation to accept, rather than defer, receiving benefits.

The Appellate Division found:

“Although an employee plainly must apply, no language in section 221 prohibits an employee from deferring receipt of social security retirement benefits until a date after regular retirement age. Moreover, at no point will there be a double recovery. When Mr. Pratt begins receiving social security retirement benefits, S.D. Warren will be entitled to coordinate those benefits with any incapacity benefits being paid. . . .).”

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