Workers Comp Fund may have to repay $15M

Those who qualify for both Social Security and workers compensation may be receiving a "wonderful" gift in the near future, thanks to a Utah Supreme Court decision issued Friday.

The decision ruled that money taken out of worker's compensation checks due to a law that offset the payments of Social Security must be paid retroactively in cases that are still active and haven't already been settled.

Since 1988, when the Utah Legislature enacted the statute, those receiving both Social Security and workers compensation benefits had their workers compensation reduced by 50 percent of the amount of the Social Security payment.

Attorney Phillip Shell, who said he has been arguing that this offset in payment is unconstitutional for three years, illustrated how this would affect payments.

"For example, if you get $2,000 in worker's compensation and $1,600 in Social Security, then they would take $800 out of your workers comp," Shell said.

He said his first victory came in April when the state Supreme Court ruled the law was unconstitutional. The second win came Friday when the justices ruled that many of those affected by the law should be paid, retroactively, all the way back to 1988.

"It's a lot of money," Shell said. "Some of our seniors have no idea what's coming down the pike for them."

Shell said he has long felt the law was unjust and he was "all smiles" following the court's decision. He was able to pursue the case with a client who was seeking total disability benefits.

"It's so unfair to take that money out of senior citizens' pockets," he said. "Some of them may be getting a wonderful Christmas gift."

In its ruling, the court acknowledged that the decision to reverse the statute retroactively may shake a system where "the overruled law has been justifiably relied upon," thus potentially creating a burden. Shell estimated as much as $15 million may be owed by the state's Workers Compensation Fund.

Though the ruling applies to any future payments, regardless of when those who are receiving workers compensation were injured, the court will restrict who might qualify for the retroactive payments.

Those who negotiated and settled claims instead of challenging the offset, will not receive payments. Inactive accounts, belonging to the deceased or "unspecified payments," including those who received some "lump sum" settlement or were not declared totally and permanently disabled, also will not qualify.

While the court acknowledged that their decision may cause "significant financial and administrative burdens" on the workers compensation industry, Chief Justice Durham wrote that jurists were persuaded by "equities inherent in the worker's compensation scheme."

e-mail: emorgan@desnews.com