Presumption of prejudice does not exist in every case where an employer seeks to recover an overpayment of compensation made to a claimant who is also receiving a pension.
The claimant, a firefighter, sustained a work injury. The employer accepted liability and paid the claimant Heart and Lung benefits equal to his full salary for over a year after the injury. The claimant then elected to take a disability pension, and the Heart and Lung benefits were replaced with workers’ compensation benefits. For approximately two months, the employer paid the claimant total disability workers’ compensation without an offset for the disability pension the employer was also paying. The employer later issued a Notice of Workers’ Compensation Benefit Offset (Form LIBC-761), which indicated that benefits were being reduced for an offset the employer was taking for the disability pension. The form also stated that the employer was further reducing the claimant’s weekly wage loss benefit by $100 a week for an overpayment of compensation made during the period of time the claimant received both temporary total disability benefits and pension benefits.
The claimant filed a petition to review the offset, alleging that the calculation was wrong. Additionally, the claimant challenged the employer’s attempt to recoup the overpayment on the basis of financial hardship and argued that the employer was not entitled to any offset since he was never provided with an Form LIBC-756 (Employee’s Report of Benefits for Offsets) before notifying him of its intention to take an offset. However, this argument was made after the record was closed, and the Workers’ Compensation Judge found that the claimant waived it. Nevertheless, the Judge determined that the employer was not required to issue Form LIBC-756 before taking the offset since they were already aware of the pension. The Judge agreed, however, that the employer was barred from recouping the overpayment due to the financial hardship it would cause. The Judge allowed the employer an ongoing pension offset, but disallowed the recovery of the overpayment. The Judge also ordered the employer to reimburse the claimant the full amount recouped. Both the claimant and the employer appealed to the Workers’ Compensation Appeal Board.
The Board affirmed the Judge. Although they agreed that the claimant had waived the issue of the LIBC-756 form being sent before taking an offset, they nevertheless held that tender of the form was a condition precedent to recovering an overpayment of benefits in every case. The Board also concluded that the employer was not entitled to a recoupment of the overpayment. The employer appealed.
The Commonwealth Court held that the issue of the employer’s failure to provide the claimant with LIBC-756 form before recouping its overpayment was waived by the claimant and, therefore, did not address the Judge’s holding that the employer did not have to issue the form before taking its offset. The court then addressed whether the employer’s recovery of the amount it overpaid to the claimant was barred by equitable principles and whether there was a “presumption of prejudice” whenever an employer seeks to recoup an overpayment of offset benefits. The court held there was no such presumption in every case. The court noted that the overpayment in question covered a period of weeks and not a period in excess of six months, and it found that the employer’s recoupment of the $100 per week from the claimant was permissible.
Case Law Alerts, 3rd Quarter, July 2014