The pension offset under Section 204(a) of the Act is not available to an employer where a compensable injury occurs within the context of a retiree’s subsequent, part-time employment with the former employer.

The claimant had retired and was receiving a pension from his employer. Although still retired, he returned to work on a part-time basis for the same employer. While working part-time, he suffered a compensable injury and received workers’ compensation benefits for an entire year while simultaneously receiving his pension. 

The employer filed a petition to take a credit for the pension against the wage loss benefits the claimant was receiving. The workers’ compensation judge found that the employer was entitled to the offset, which resulted in the claimant receiving no wage loss benefits for his work injury. 

The claimant appealed to the Workers’ Compensation Appeal Board, which reversed. The Board, although there was a gap in Section 204(a) of the Act, considering equitable principles, the spirit of the law and the humanitarian purpose of the Act, found the employer was not entitled to a credit.
 
The employer appealed to the Commonwealth Court, and the court affirmed the Appeal Board. The court first determined that Section 204(a)’s pension offset provision was ambiguous, leading the court to review the other credit provisions in Section 204(a) in order to understand the ambiguity. According to the court, the credit provisions work together to ensure that a claimant is made whole by receiving wage loss benefits in an amount no greater than what he could reasonably have expected had he not been injured. The court said the goal of the Section 204(a) credits is to prevent double recovery on the part of the claimant, or double payment on the part of the employer, for a single wage loss. 

Therefore, the court rejected interpreting Section 204(a) literally because, in this case, it would not eliminate double recovery for the claimant’s wage loss but, rather, would eliminate any recovery for wage loss. The court said, where there are two reasonable interpretations (literal and contextual) and a case that presents a close call, borderline interpretations of the Act are to be construed in the injured party’s favor. 

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