Beware: The Amount of Pension Offset an Employer Can Take From Workers’ Compensation Weekly Wage Loss Benefits Depends on Amount of Employer Contribution to Pension Plan

In 1996 the Pennsylvania Workers’ Compenation Act was amended and one of those changes was the provision for certain credits applied against ongoing weekly workers’ compensation checks including the receipt of Security Security “Old Age” Pensions and private pension plans. While the 50% offset allowed was normally straight forward for “Old Age Pensions”, the credit allowed was more complicated for private pensions where both the employer and employee contributed to the pension fund.

In the case of City of Philadelphia v. WCAB (Andrews) 2008 the Commonwealth Court held that the Employer City was incorrect in their interpretation that they were entitled to a complete offset. The court rejected that argument and held that the employer was obliged to show its contributions before an ascertainment of its entitlement to a credit could be make.

Furthermore, the employer was prohibited from unilaterally taking the credit and was admonished for not following the Act 57 Regulations in filing the proper notices with the claimant and the Bureau of Workers’ Compensation regarding its taking of the offset.

Therefore, injured workers should be careful to not allow employers or insurance carriers to take these credits without giving proper notice and to make certain that the credit factors in any contributions made by the employee over the life of the pension.