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|Issues:||Credit and Offset (Severance Pay)|
|Case Name:||Kramer v. WCAB (Rite Aide Corp.)February 22, 2002|
|Synopsis:||FACTS: The claimant in this case received severance pay pursuant to a collective bargaining agreement when his employer relocated to another state. Pursuant to § 204(a) the insurance carrier took a credit against the claimant's workers' compensation benefit.|
DECISION: Insurance carrier denied credit for severance benefits by the Commonwealth Court.
REASONING: The Court concluded that the literal language of § 204(a) specifically provides the offset to the "employer directly liable for the payment of compensation". (emphasis added)
|Practice Points:||This Decision impacts and insurance carrier's right to take credit for severance pay. |
Third party administrators should continue to take an offset for severance pay paid by the employer who is liable for the payment of compensation.