Should I Collect Pension Benefits While on Workers’ Compensation?

by Karl Voigt

The laws surrounding the effect of collecting retirement benefits on Workers’ Compensation wage loss benefits has been evolving rapidly. The Pennsylvania Supreme Court has recently issued an important decision regarding interaction of these benefits. It has reversed the 2012 holding from the Commonwealth Court that created a presumption that an individual had withdrawn from the workforce simply by virtue of collecting retirement benefits. An injured worker who claims that he is retired from the workforce is considered to have withdrawn from the workforce and therefore is not eligible for Workers’ Compensation wage loss benefits.

Happily for Workers’ Compensation claimants approaching retirement age, the Pennsylvania Supreme Court has recently rejected this rule, opting to allow judges to consider a “totality of the circumstances” approach to determining whether a claimant has withdrawn from the workforce. The lower Court’s ruling would have allowed an insurer to stop wage loss benefits the moment an injured worker received pension benefits from an employer.

The Pennsylvania Supreme Court, in City of Pittsburgh v. WCAB (Robinson), ___ A.3d ___ (Pa. 2013) (filed March 25, 2013), rejected that rule, finding it unfair to allow a presumption of withdrawal simply from an injured worker’s application for pension. The Court reasoned that a judge must look at all of the evidence.

So an injured worker’s receipt of pension benefits, standing alone, is not enough to prove that he has withdrawn from the workforce. Howwver, an employer may still attempt to prove that an injured worker has withdrawn from the workforce. They can even use evidence of application for pension to support the allegation. However, the judge must consider the “totality of the circumstances”. Namely, if the injured worker continues to seek employment elsewhere or can show that she was forced into retirement because of the work injury, her Workers’ Compensation wage loss benefits should indeed continue.

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