Opinion
W.C. No. 3-870-606
April 5, 1999.
FINAL ORDER
The claimant seeks review of an order of Administrative Law Judge Stuber (ALJ) which entitles the respondents to reduce the claimant's permanent total disability benefits by one-half of the social security disability (SSDI) benefits payable to each of his natural children. The claimant argues that the offset is inappropriate since the natural children do not reside with him. The claimant also argues that the ALJ improperly calculated the offset insofar as it includes SSDI benefits paid to a stepchild. We affirm the order insofar as it permits the offset, but modify the amount of the offset.
The claimant sustained a compensable injury in July 1987. The claimant reached maximum medical improvement in January 1998, and the respondents admitted liability for permanent total disability benefits commencing January 18, 1998.
The issue in the case concerns the respondents' right to reduce their liability for permanent total disability benefits on account of SSDI benefits paid to the claimant's two biological children and one stepchild. The ALJ found the claimant's two biological children were born on March 10, 1980, and December 12, 1981. The claimant's marriage to the mother of the children was dissolved by order of court in 1986. Although the order of dissolution contained no order concerning child support, the ALJ determined that the claimant had an obligation to support the children and "provided sporadic occasional monetary support" to them.
The claimant subsequently remarried. His new wife had a child by a previous marriage, but the claimant never adopted this child. The claimant's marriage to the second wife was dissolved in 1995.
In 1991, the claimant began receiving SSDI benefits in the amount of $456.60 per month. In June 1991, the two natural children began receiving SSDI benefits of $89.20 per month each. In October 1993, the stepchild began receiving SSDI benefits in the amount of $63.50 per month. When the stepchild began receiving SSDI benefits the natural children's SSDI benefits were reduced to $63.50 per month each. It is undisputed that $63.50 represents one-third of the original SSDI award as augmented by cost of living allowances. If the claimant had three natural children in June 1991, the respondents would have claimed an offset based on each child receiving SSDI benefits of $59 per month. (Tr. pp. 40-41).
Under these circumstances, the ALJ held that the two natural children are "dependents" of the claimant for purposes of the 50 percent SSDI offset contained in § 8-42-103(1)(c)(I), C.R.S. 1998. Specifically, the ALJ found that the two natural children are presumed to be wholly dependent on the claimant under the provisions of § 8-41-501(1)(b) and (c), C.R.S. 1998. Further, the ALJ cited Dietiker v. Industrial Claim Appeals Office, 867 P.2d 171 (Colo.App. 1993), for the proposition that the statutory presumption of dependency governs the meaning of the word "dependents" as used in § 8-42-103(1)(c)(I). Consequently, the ALJ concluded that the respondents are entitled to an SSDI offset "for one-half of the dependent benefits paid to each of [the claimant's] natural children" in the amount of $89.20 per month.
However, the ALJ rejected the claimant's argument that the respondents are not entitled to an offset for that portion of the SSDI benefits paid to the stepchild commencing in October 1993. The ALJ again cited Dietiker v. Industrial Claim Appeals Office, supra, holding that the respondents are entitled to an offset for one-half the sum initially received by the claimant's natural children, or $89.20 per month.
I.
On review, the claimant first contends the ALJ erred in awarding any offset based on SSDI benefits paid to the natural children. The claimant argues that the purpose of the SSDI offset is to prevent double compensation for the same disability. However, the claimant asserts that the statutory objective would not be served in this case because the children reside with their mother in Michigan and he was never ordered to pay child support. We are unpersuaded.
Section 8-42-103(1)(c)(I) provides that temporary and permanent disability benefits shall be reduced by 50 percent of the SSDI benefits payable to the "individual and said individual's dependents." Generally, the rationale for the offset provisions is to coordinate benefits and prevent duplication. See Culver v. Ace Electric, 971 P.2d 664 (Colo. 1999).
The claimant's arguments notwithstanding, the ALJ's order does not violate these principles. As the ALJ noted, Dietiker v. Industrial Claim Appeals Office, supra, holds that the definition of the word "dependents," as used in § 8-42-103(1)(c) (I), is controlled by state law, and specifically § 8-41-501(1) and § 8-41-502, C.R.S. 1998. The ALJ ruled that the natural children are presumed to be wholly dependent on the claimant under § 8-41-501(1)(b) and (c) because the claimant has a duty to support them, and he in fact provides support on a sporadic basis. The ALJ's ruling was correct because the presumption of dependency can be overcome only by showing that the children derive absolutely no support from the claimant. Knight v. Department of Natural Resources, 689 P.2d 733 (Colo.App. 1984); Cordle v. Academy Roofing, Inc., W.C. No. 4-158-908 (June 9, 1995). Moreover, the presumption created by § 8-41-501(1) is founded on the legal obligation of natural parents to support their children. Truitt v. Industrial Commission, 31 Colo. App. 166, 499 P.2d 621 (1972).
It follows that the claimant's arguments are without merit. Because the claimant is legally obligated to provide financial support to his children, and does so on an occasional basis, he benefits from the payment of SSDI to his children. The claimant concedes at page 5 of his brief that if he were to obtain a court order concerning his child support obligation, he could seek a reduction in support payments based on the SSDI payments. The mere fact that the claimant has not formalized his obligation affords no basis for circumventing the coordination of benefits contemplated by § 8-42-103(1)(c)(I), or the respondents' right to obtain an offset based on the plain provisions of the statute. See Ihnen v. Western Forge, 936 P.2d 634 (Colo.App. 1997).
II.
The claimant next contends the ALJ erred because he did not reduce the SSDI offset when the Social Security Administration began to pay a portion of the SSDI benefits to the stepchild. The claimant argues that the stepchild was not his "dependent" for purposes of § 8-42-103(1)(c)(I), and therefore, SSDI paid to the stepchild is not subject to offset under the statute. We agree with this argument.
As pointed out in Dietiker v. Industrial Claim Appeals Office, supra, an unadopted stepchild does not qualify as a dependent under the provisions of § 8-41-501(1) or § 8-41-502. See also, Tri-State Commodities, Inc. v. Stewart, 689 P.2d 712 (Colo.App. 1994). Therefore, the stepchild does not qualify as a dependent for purposes of § 8-42-103(1)(c)(I), and the respondents are not entitled to an offset for payments which the Social Security Administration made to the claimant's stepchild.
Our conclusion is fully supported by the holding in Dietiker v. Industrial Claim Appeals Office, supra. In Dietiker, the court held that the respondents were entitled to an SSDI offset based on amounts paid to the claimant's stepchildren only from the date the claimant formally adopted them. 867 P.2d at 174. Similarly, the court held that the respondents were not entitled to an offset for SSDI paid to the claimant's ex-wife after their divorce. This was true because the claimant's obligation to support the ex-wife terminated at the time of the divorce and she was no longer the claimant's "dependent." 867 P.2d at 173.
Insofar as Dietiker held that the amount of the SSDI offset is dependent on the amount of the "initial" SSDI award, the case does not affect our ruling here. Dietiker merely held that the offset must be predicated on the initial entitlement to SSDI benefits, not the increased amount resulting from subsequent cost of living allowances. That portion of the holding does not suggest, as the ALJ apparently concluded, that respondents are entitled to an offset for SSDI benefits paid to a person not qualified as the claimant's statutory dependent.
It follows that, commencing in October 1993, the SSDI offset must be reduced to reflect that a portion of the SSDI benefits were being paid to the claimant's stepchild. Consequently, commencing in October 1993 the respondents are entitled to an offset based on 50 percent of $118 per month ($59 per month), rather than the $89.20 per month ordered by the ALJ.
IT IS THEREFORE ORDERED that the ALJ's order dated June 24, 1998, is modified to reflect that the respondents are entitled to an offset of $59 per month, commencing in October 1993, on account of SSDI benefits paid to the claimant's dependents.
IT IS FURTHER ORDERED that the ALJ's order is otherwise affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
______________________________ David Cain ______________________________ Dona Halsey
NOTICE
This Order is final unless an action to modify or vacate the Order is commenced in the Colorado Court of Appeals, 2 East 14th Avenue, Denver, Colorado 80203, by filing a petition to review with the court, with service of a copy of the petition upon the Industrial Claim Appeals Office and all other parties, within twenty (20) days after the date the Order was mailed, pursuant to §§ 8-43-301(10) and 307, C.R.S. 1998.
Copies of this decision were mailed April 5, 1999 to the following parties:
John Cody, P.O. Box 603, Fountain, CO 80817
El Paso County Search Rescue, 3950 Interpark Dr., Colorado Springs, CO 80907-5066
Brandee DeFalco Galvin, Esq., Colorado Compensation Insurance Authority — Interagency Mail (For Respondents)
William A. Alexander, Jr., Esq., 3608 Galley Rd., Colorado Springs, CO 80909-4349 (For Claimant)
By: AP