The only question I can answer with absolute certainty is YES the IC will be the only entity to make out better. As for SSDI benefits there is many, MANY, posts in this forum that explains how to avoid or at least minimize the offset for the SSDI when accepting a WC settlement. Here are a few links to help you out;
Quoting Wifes Support
This is from a Tennessee law firm however, it is applicable for most all other states as well as The SSA is a federal program and the rules are seldom IF ever any different from one state to another where WC causes an offset to SSDI. There are a handful of states that the WC IC takes the offset but, that has NO bearing on your issues with a settlement.
"Attorneys who handle workers’ compensation cases already know that the Sociallifetime of the injured worker."
Security Administration (“SSA”) will reduce the benefits paid for injured workers who
also receive worker’s comp benefits. Most attorneys also know that their client’s Social
Security benefits can be protected by ensuring that language is put in the worker’s
compensation settlement order that pro-rates the worker’s comp settlement over the
This one is from a Georgia law firm.
Ensure that Your Settlement Agreement Includes Social Security Offset Language
"Your settlement agreement should include language which states that it is the intent of the parties to treat any settlement proceeds payable to you as if they are to be spread out over the course of your remaining life expectancy, even if you in fact receive your settlement as a present-value lump sum amount. In Georgia, this language is referred to as "Hartmann language" (named after the lawyer who initially drafted this language for use by the Board), and this language protects your current or future SSDI benefits against being otherwise reduced or eliminated.
Ensure that Your Settlement Agreement Considers Medicare's Interests if Necessary
In some cases, your workers' compensation settlement must also include language that protects Medicare's interests in addition to language that deals with Social Security offsets. Medicare is government health insurance linked to SSDI and specific language should be included in your settlement documents to ensure that your interests, as well as those of Medicare, are protected. The issues involved with protecting Medicare's interests in workers' compensation settlements are complex (and change too frequently to adequately address here) and should therefore be discussed with an experienced workers' compensation attorney."
And last but certainly NOT least directly from a NY state linked web site.
"A. Life expectancy (LE) awards
A lump sum award may specify a payment amount based on the number holder’s (NH) life expectancy determined by insurance life expectancy tables. The life expectancy of the NH is often given in weeks, months, or years. These awards usually specify a life expectancy (LE) rate.
If the award does not stipulate a specific length of time for the life expectancy, develop for clarification, as necessary. List all life expectancy lump sum proration cases under listing code 557.
NOTE: The mention of a monthly LE rate in a LS award does not bind SSA to allocate expenses in a specific manner.
1. Determining the LE rate
If the LS award specifies a rate based on LE, determine whether excludable expenses were deducted in deriving the LE rate specified in the award:
NOTE: The requirement to consider all three proration methods in a LE case represents a change of position (COP). Implementation of the change is effective 06/29/2006. Do not reopen determinations processed before that date.
A LS award of $100,000 is approved with a valid excludable attorney fee of $20,000 and a valid excludable medical expense of $10,000.00. The LS settlement states the NH’s LE is 2,000 weeks and a life expectancy rate of $40 per week.
- The $20,000 attorney fee was taken into consideration to compute the life expectancy rate ($100,000 - $20,000 = $80,000 divided by 2,000 weeks = $40.00 week.)
- The correct LE rate for proration purposes is determined by dividing the gross LS by the NH’s life expectancy: $100,000 divided by 2,000 weeks = $50.
- To prorate the LS, the correct weekly WC rate to use is $50 (i.e., the amount to enter in the Modernized Claims System (MCS) or the Interactive Computation Facility (ICF).
- Medical expenses of $10,000 and attorney expenses of $20,000 are then deducted from the gross LS (i.e., enter expenses in the appropriate data fields in MCS or ICF). MCS and ICF use all three proration methods to determine the method most advantageous.
A NH receives a LS award of $45,000 with valid attorney expenses of $11,250 and valid medical expenses of $1,730.77. The award contains language indicating the settlement represents $57.63 per month for 46.3 years. To determine whether excludable expenses were deducted in deriving the $57.63 LE rate in the LS award:
This example illustrates that all attorney and medical expenses were deducted. Therefore, we must determine the correct LE rate for proration purposes.
- Multiply $57.63 x 12 (months) x 46.3 (years) = $32,019.23.
- $32,019.23 + $11,250.00 + $1,730.77 = $45,000.00 (total award amount)
To input into the MCS and ICF programs, enter the gross LS amount of $45000, the LE monthly proration rate of $80.90, excludable attorney expenses of $11,250.00, and excludable medical expenses of $1,730.77. MCS and ICF use all three proration methods to determine the most advantageous method.
- Consider all three proration methods and determine which is most advantageous. Compute the monthly rate before deduction of the expenses.
- Multiply 46.3 x 12 = 555.6 (total months represented in award)
- Divide $45,000 by 555.6 = $80.99 (rounded to the next lower dime) = $80.90 (LE monthly rate before expenses).
2. LS award language
If the wording in an LS award appears to be unreasonable and existing Regional Office of the General Counsel (OGC) precedents, fail to provide guidance:
Examples of unreasonable language in a LS award include:
- Prepare the case for policy submittal per DI 52140.015.
- Continue to offset at the previous weekly rate to prevent overpayment but do not make any determination on the lump sum until receiving a submittal response.
- A proration period that greatly exceeds life expectancy
NOTE: Contradictory language in a lump sum settlement requires further development for clarification."
EXAMPLE: The LE period ends when the worker attains age 200.
- Stipulation of a proration start date that precludes offset
EXAMPLE: The terms of the settlement specify that the lump sum settlement is “for WC benefits payable beginning at age 65. (See PR 02505.046 South Dakota)
- Settlement language cites a small monthly rate up to age 65 with a significantly larger rate beginning at age 65 and continuing
EXAMPLE: The plaintiff’s average weekly wage is determined to be $350.00. Based on this, the rate for temporary total WC payments is determined to be $250.00 weekly and permanent total payments to be $175.00.
The NH is found permanently and totally disabled as a result of an injury occurring on 05/08/2001 and is awarded benefits from the date of maximum medical improvement, 07/12/2001 and continuing.
The award states the settlement represents weekly WC payments of $100 beginning the date of maximum medical improvement (07/12/2001) up to age 65 (09/02/2012) and weekly payments of $250.00 effective age 65.
I hope you find this information helpful in your decision making process to do a section 32 or not. As you can see using SS language IS the trigger that needs pulled so that your SSDI is NOT effected or is minimally effected. IF you have an attorney that is NOT familiar with "The Social Security Language" that pro-rates a lump sum WC settlement over the IW's life expectancy then I suggest you enlighten him/her or find one that does know how to properly word your settlement documents.
Good luck to you.