Fried, Kane, Walters, Zuschlag and Grochmal PO Box 955
Gibsonia, PA 15044-0955

FKWZ&G Proves Employer Entitled to Credit for Pension Benefit Awarded Retroactively

Gelvin v. WCAB (Pennsylvania State Police), No. 1503 C.D. 2014, filed July 13, 2015

Factual and Procedural Background
Employer voluntarily picked up a work-related injury of PTSD during litigation on a Claim Petition. Claimant subsequently filed reinstatement and penalty petitions, alleging that the employer had unilaterally stopped her benefits and took an improper offset based on her receipt of a partially employer-funded pension. Claimant had completed the LIBC-756 form reporting receipt of the pension in March 2012, three months after she had previously completed a form. The December 2011 form recorded no benefits to report, where the March 2012 form reported her receipt of the pension. Employer issued the Notice of Workers' Compensation Benefit Offset within 2 weeks of the completion of the LIBC Form, advising that benefits would be suspended for approximately 11 months based on an overpayment. This overpayment resulted from the retroactive benefits to which she was entitled from her pension application.

The WCJ determined that Employer was only entitled to a retroactive credit as of the date Claimant completed the LIBC form, the form that was sent to her after her receipt of the pension. The claimant's benefits were reinstated at the reduced rate with the offset from her ongoing receipt of the pension. A penalty of 50% was also imposed for a finding that the employer had improperly and unilaterally recouped her benefits by suspending her. FKWZ&G appealed to the Board, which found that there was no statutory provision or regulation requiring and employer to file a suspension petition to recoup an overpayment made to a claimant. The Board held that the Employer had acted with due diligence in notifying claimant of her duty to report these benefits, in contrast to what had occurred in Maxim Crane. The Board thought it absurd that an employer would only be entitled to an offset if it sent the LIBC-756 form and it was received by an employee on the very day that employee received a retroactive payment of qualifying benefits. If they had affirmed the WCJ's decision, the claimant would have received a double recovery and so therefore Employer was entitled to recoup the retroactive payment of pension benefits.

Commonwealth Court Decision
The Commonwealth Court held that again, Maxim Crane was inapplicable to these facts, in light of the delay in that case in advising the claimant of his duty to report benefits received. Based on that employer's failure to act with due diligence, the Court could presume hardship and prejudice to the claimant. In this case, the employer had complied with its duty under Maxim Crane to provide the claimant with the form. In fact, this employer had sent her two reporting forms within 3 months, the second less than two weeks after she received her pension benefits. As such, the large retrospective offset was not due to any lack of diligence on the employer's part. The Commonwealth Court also stated that its statement of a presumption of hardship was based on the specific facts of that case, and did not establish a presumption of prejudice when recouping any overpayment of benefits. The Court also stated that Claimant had never requested a reduction in the recoupment amount to reduce her alleged financial hardship, and was incorrectly relying on a Finding of Fact which summarized her testimony for the claim that the WCJ had found she was suffering a severe hardship. Finally, the Court noted that 34 Pa. Code 123.4 allows an employer to take an offset unilaterally, and therefore the employer did not violate the Act.