The Pennsylvania Commonwealth Court Further Illustrates How A Claimant’s Retirement Status Can End Eligibility For Indemnity Benefits Entitlement

June 10, 2011

Background Facts of Case

In 1992, Claimant sustained an occupational injury.  As a result, he worked at a modified-duty position from around 1996 through 2001, when he was laid-off.  Claimant subsequently received total disability workers’ compensation indemnity benefits.  Claimant still had certain lifting restrictions residual from his work injury.  Then, around 2001, Claimant began receiving Social Security Administration (SSA) retirement benefits, and pension benefits from the Employer.  Claimant did not look for work thereafter.  A Suspension Petition was filed, alleging that Claimant had voluntarily withdrawn himself from the workforce and was therefore ineligible for workers’ compensation indemnity benefits payments.

Following litigation of this petition, the Workers’ Compensation Judge (WCJ) agreed, based upon the evidence presented, that Claimant had indeed voluntarily removed himself from the workforce and that this was the reason for his current wage loss.  Consequently, the Suspension Petition was granted.  Claimant appealed, and the Workers’ Compensation Appeal Board (WCAB) affirmed the WCJ’s decision.  Claimant further appealed to the Pennsylvania Commonwealth Court.

Commonwealth Court Holding

In addressing this issue, the Commonwealth Court first cited the standards enunciated by the Pennsylvania Supreme Court in Southeastern Pennsylvania Transportation Authority v. WCAB (Henderson), 669 A2d 911 (1995).  For indemnity benefits payments to continue after a claimant retires, the claimant must prove: 1) he is seeking employment after retirement, or 2) he was forced out of the labor market and into retirement because of residuals from the work injury.  See also County of Allegheny (Dept. of Public Works) v. WCAB (Weis) , 872 A.2d 263 (Pa. Cmnwlth. 2005).  The Commonwealth Court also explained that an employer is not required to prove availability of suitable work, when pursuing a Suspension under these circumstances, if the claimant voluntarily removed himself from the labor market through retirement.

The Commonwealth Court then discussed the Pennsylvania Supreme Court case of Republic Steel Corp. v. WCAB (Petrisek) , 640 A.2d 1266 (1994).  In this case, the claimant voluntarily retired from his coalmining work in 1981 and filed a Claim Petition, based upon pneumoconiosis, in 1988.  The WCJ granted benefits and the WCAB affirmed.  The Employer appealed, contending the claimant was unentitled to an indemnity benefits award because he had voluntarily retired, that he did not intend to return to work, and that he therefore sustained no wage loss caused by his occupational disease.  The Supreme Court ultimately determined that entitlement to indemnity benefits payments is contingent upon proof that a claimant’s workplace injury or disease adversely affects his ability to earn wages.  However, because the claimant in this case had retired, there was no evidence on the record that claimant was experiencing lost earning power due to his occupational disease, and accordingly, the claimant was found unentitled to indemnity benefits payments.

In the instant case, Claimant was receiving a pension from the employer, was collecting SSA retirement benefits, and was not looking for work.  This was all considered evidence establishing that Claimant had terminated his working career.  Therefore, Claimant’s eligibility for indemnity benefits payments was considered to have been properly suspended in this situation.

This case was distinguished from City of Pittsburgh v. WCAB (Robinson), issued by the Commonwealth Court a few days earlier, on September 22, 2010.  In Robinson, although the claimant was receiving a disability pension, paid by the employer, he continued to look for work.  Therefore, in Robinson, the Commonwealth Court found that the claimant remained attached to the workforce and had not retired.  The Commonwealth Court held that the claimant in Robinson could simultaneously receive disability retirement benefits and workers’ compensation indemnity benefits [although the pension benefits are subject to offsetting the indemnity benefits payments pursuant to Section 204(a) of the Pennsylvania Workers’ Compensation Act, as amended].

Lesson

In any case where a claimant receives SSA retirement benefits, a retirement pension, or disability pension benefits, or when he has otherwise declared his status as “retired” and has thus voluntarily removed himself from the workforce, ascertain the background facts that led to the claimant’s retirement and forward the case for legal review to determine if the facts merit pursuit of a Suspension of workers’ compensation wage loss benefits under the circumstances, i.e. whether your case’s fact pattern fits within the parameters of Day v. WCAB and the Republic Steel cases outlined above, so that a Suspension Petition can be pursued on this basis.

If you would like a copy of Day v. WCAB (City of Pittsburgh), issued by the Commonwealth Court on October 18, 2010, or would like to further discuss it, please do not hesitate to contact any of us.

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