Taking Money From Your Pocket

Under Pennsylvania Law, an employer is entitled to a credit equal to 50% of any old age benefits against workers' compensation benefits the employee receives. If the employee was collecting old age benefits before the work injury occurred, the employer is not entitled to a credit. This credit does not apply to social security disability benefits.

For example, if an employee receives $2,200.00 per month in workers' compensation benefits and $1,100.00 per month in social security retirement benefits (old age benefits), the insurance company would be obligated to pay only $1,650.00 monthly. ($2,200-$1,100/2=$1,650.00)

In Caputo v. WCAB, an injured worker challenged this position, arguing that it was a violation of the Pennsylvania Constitution. The Court rejected the employee's challenge.

Bottom line: Employers are entitled to reduce payments of workers' compensation benefits by 50% of social security retirement benefits the injured worker receives.

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