Opinion
W.C. No. 4-252-253
May 27, 1998
FINAL ORDER
The respondent seeks review of an order of the Director of the Division of Workers' Compensation (Director), insofar as it calculated the offset for social security disability insurance (SSDI) benefits to be taken against the claimant's permanent partial disability award. We modify the Director's order.
The pertinent facts are undisputed. The claimant suffered a compensable injury on April 17, 1995, and reached maximum medical improvement (MMI) on July 31, 1996.
Section 8-42-107(8)(d), C.R.S. 1997, establishes a formula for calculating permanent partial disability benefits based on whole person medical impairment. Under this formula, the medical impairment rating is multiplied by the age factor. That number is then multiplied by 400 weeks, then multiplied by the claimant's temporary total disability rate. Here, the claimant's impairment rating is forty-five percent, and the age factor is 1.14. The claimant's temporary total disability rate is $424.37 up to October 1, 1996, and $442.61 thereafter. Section 8-47-106 C.R.S. 1997; see also Director's Order dated July 1, 1994. Based upon the statutory calculation, the claimant is entitled to permanent partial disability benefits totaling $90,668.31. (45% x 1.14 age factor x 400 weeks x claimant's temporary disability rates).
However, § 8-42-103(1)(c)(I), C.R.S. 1997, provides that the "aggregate benefits payable" for permanent partial disability shall be reduced by "one-half" the amount of SSDI benefits received by the claimant. The claimant receives SSDI benefits of $1183 per month or $273 per week. One-half of the claimant's SSDI benefit is $136.50 per week.
The Director determined that $90,668.31 represents the "aggregate" benefits payable for permanent partial disability, and that this award would equal 205.2 weeks of permanent partial benefits if paid at the claimant's temporary total disability rate. Furthermore, the Director determined that the respondents are entitled to an SSDI offset in the same percentage as the ratio between the weekly SSDI offset and the claimant's temporary disability rate. Therefore, the Director multiplied the SSDI offset of $136.50 per week by 205.-1.5/7 weeks to arrive at a total offset of $28,011.75. The permanent partial disability award of $90,668.31 less $28,011.75 equals $62,656.66. Therefore, the Director ordered the respondents to pay permanent partial disability benefits of $62,656.66.
On review, the respondents point out that the purpose of the statutory offset for SSDI benefits is to prevent an injured worker from receiving a double recovery of SSDI and workers' compensation benefits for the same wage loss. See Engelbrecht v. Hartford Accident Indemnity Co., 680 P.2d 231 (Colo. 1984). Thus, they contend that the Director's order is contrary to applicable law and results in a double recovery of permanent partial disability benefits and SSDI benefits. We agree.
In Yates v. Sinton Dairy, 883 P.2d 562 (Colo.App. 1994), the court held that, for purposes of applying an SSDI offset against temporary disability benefits, the term "aggregate benefits payable" refers to the maximum weekly temporary disability rate allowed by law. Temporary disability benefits are payable in an amount equal to sixty-six and two-thirds percent of the claimant's average weekly wage, up to a maximum of ninety-one percent of the state average weekly wage. Section 8-42-105(1), C.R.S. 1997. Thus, where the claimant's average weekly wage results in a temporary disability rate exceeding ninety-one percent of the state average weekly wage, temporary disability benefits are payable at the maximum rate of ninety-one percent of the state average weekly wage. The Yates court concluded that, because the claimant's temporary disability rate exceeded the maximum temporary disability rate allowed under § 8-42-105, the SSDI offset was to be subtracted from the maximum temporary disability rate, not the claimant's average weekly wage prior to reduction to the maximum rate. We conclude that the reasoning in Yates is persuasive with respect to the issue presented here.
The claimant's "temporary total disability rate" is only one factor contained in the statutory formula for calculating permanent partial disability benefits under § 8-42-107(8)(d). See Broadmoor Hotel v. Industrial Claim Appeals Office, 939 P.2d 460 (Colo.App. 1996); Durocher v. Industrial Claim Appeals Office, 905 P.2d 4 (Colo.App. 1995). However, the temporary total disability rate does not determine the rate at which permanent partial disability benefits are "payable" to the claimant for purposes of § 8-42-103(c)(I). Rather, § 8-42-107(8)(d) provides that permanent partial disability benefits are paid out to the claimant at the temporary total disability rate except that benefits shall not be "less than one hundred fifty dollars per week and not more than fifty percent of the state average weekly wage." It follows that where, as here, the claimant's temporary disability rate exceeds fifty percent of the state average weekly wage, the "aggregate benefit payable" for permanent partial disability benefits in any given week is fifty percent of the state average weekly wage. Cf. Yates v. Sinton Dairy, supra.
The state average weekly wage applicable to this claim is $486.37. See section 8-47-106; Director's Order dated July 1, 1994. Therefore, fifty percent of the state average weekly wage is $243.37 per week.
Furthermore, it is undisputed that the claimant's temporary disability rate exceeds $243.18, and therefore, the "aggregate benefit payable" to the claimant for permanent partial disability is $243.18 per week. It follows that the Director erred insofar as she calculated the SSDI offset based upon the claimant's temporary disability rate. Yates v. Sinton Dairy, supra.
Moreover, at the statutory rate of $243.18 per week, the claimant is entitled to receive permanent partial disability benefits for 372.8 weeks, not 205.2 weeks. Thus, to a avoid a double recovery of full SSDI and permanent partial disability benefits for 167.6 weeks (372.8 — 205.2), the respondent is entitled to a SSDI offset of $136.50 per week for 372.8 weeks, or a total offset of $50,887.20. Cf. Ihnen v. Western Forge, 936 P.2d 634 (Colo.App. 1997) (SSDI offset based on amount claimant would receive if the claimant applied for SSDI, and is not dependent on actual receipt of SSDI). Subtracting the total SSDI offset from the permanent partial disability award of $90,668.31 leaves a balance of $39,781.11. Consequently, the respondent is liable for permanent partial disability benefits in the amount of $39,781.11, and we modify the Director's order accordingly.
We recognize that this calculation results in a greater SSDI offset and a lower permanent partial disability award than the Director's calculations. However, our conclusions are consistent with the fact that the General Assembly capped the aggregate benefit payable for permanent partial disability benefits at fifty percent of the state average weekly wage. The cap reflects a legislative intent to extend the time period for the payment of permanent partial disability benefits, and correspondingly, increase the available offset for SSDI benefits.
IT IS THEREFORE ORDERED that the Director's order dated January 5, 1998, is modified to provide that the respondent shall pay permanent partial disability benefits of $39,781.11.
INDUSTRIAL CLAIM APPEALS PANEL ____________________________________ David Cain ____________________________________ Kathy E. DeanNOTICE This Order is final unless an action to modify or vacate this Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, CO 80203, by filing a petition for review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date this Order is mailed, pursuant to section 8-43-301(10) and 307, C.R.S. 1997.
Copies of this decision were mailed May 27, 1998 to the following parties:
John E. Armijo, 1214 S. Sweetwater, Pueblo West, CO 81007
Nancy Colvin, Workers' Compensation, CF I Steel, L.P., P.O. Box 316, Pueblo, CO 81002
Dee Hyslop, Carrier Practices Officer, Div. of Workers' Compensation (Interagency Mail)
Everett Fitzgerald, Self-Insured Reserve Officer, Div. Of Workers' Compensation (Interagency Mail) Scott J. Mikulecky, Esq., 1700 Broadway, Ste. 1700, Denver, CO 80290-1701 (For the Respondents)
William Macdonald, Esq., 1890 Gaylord St., Denver, CO 80206 (For the Claimant)
BY: _______________________