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Answers are provided by Robert S. Kaufman
(Posted July 21, 2003)
Question 288: My husband was injured on his railroad job and received a settlement through the Longshore Act. He just received a letter saying he met the requirements for permanent disability through RRB. We understand the rules for reduction of the disability annuity because of a workers comp settlement. (If the Tier I portion + the monthly comp. is more than 80% average earnings the disability will be reduced accordingly.) His settlement specifically states that the lump sum he received is to be spread out over the 35 years remaining in his life expectancy and states a monthly rate of $308.00. Social Security Ruling 87-21c states that in prorating a lump sum the first Priority is the amount specified in the agreement and if life expectancy is stated that is the what is to be used. The second method is the amount he was receiving in comp. before the settlement.
My question is, will the RRB use Social Security rulings when computing his annuity for the Tier I portion? His case worker says the RRB will recoup all of the lump sum settlement leaving him with only about $200.00 of Tier II annuity. The research I've done is contrary, because the $308.00 comp. spread over life expectancy plus his approximate $1,200.00 of Tier I annuity benefits do not exceed his average earnings before injury.
Answer: It sounds like you've really done your homework on this subject! As a general rule, the RRB follows SSA rules in determining Tier 1 benefits. But there are some exceptions due to certain differences between the two systems. Your husband's case is unusual because in most on-the-job railroad injuries, the injured worker does not receive workers' compensation. Instead, the worker must sue the railroad under a special federal law.
Your husband should file for a disability annuity at the RRB. After his claim is processed and his benefits are awarded, he should ask for a written explanation of how his Tier 1 benefits were computed and what reduction was made for workers' compensation. If he is not satisified with what the RRB did, he can ask for formal reconsideration of his claim and then he can formally appeal the RRB's decision on his claim.
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