20 CFR 404.408
Swain v. Schweiker, 676 F.2d 543 (11th Cir. 1982), cert. denied, _____ U.S. _____, 51 U.S.L.W. 3363 (11/8/82).
HILL, Circuit Judge:
The Secretary of Health and Human Services appeals the decision of the district court ordering the Secretary to reimburse each appellee for any past reduction in Social Security disability benefits made as an offset for workmen's compensation benefits paid to each appellee under Florida law. The sole question presented is whether the district court erred in its interpretation of the offset provision in § 224 of the Social Security Act, 42 U.S.C. § 424a (1976).
Federal Social Security benefits based on a worker's disability are provided by § 223 of the Social Security Act ("the Act"), 42 U.S.C. § 423 (1976). Section 224(a) of the Act provides an offset against those benefits for workmen's compensation received (normally under state law) by the beneficiary. Generally, the offset applies when the total of an individual's benefits and workers' compensation exceeds eighty percent of his or her pre-disability earnings, and it reduces federal benefits by the excess. An exception to the operation of § 224(a) comes into effect if the workmen's compensation law provides an offset for entitlement to federal benefits; § 224(d) states:
Florida law, as the Secretary admits, does reduce workers' compensation payments to the extent that those payments and social security benefits aggregate to more than eighty percent of pre-disability earnings. See Fla.Stat. § 440.15(10); Dep't of Trans., Div. of Risk Management v. Lindsey, 383 So.2d 956 (Fla.App. 1980). However, the state reduces its benefits only when federal benefits are received. The relevant subsection provides:
Fla.Stat. § 440.15(10)(c). Florida courts have held that the state statute does not allow for either retroactive application or for recovery of excess payments resulting from the employer's failure to take the appropriate reduction; imposition of an offset against workers' compensation by the amount of any past-due lump-sum social security benefits is thus precluded. See Lindsey, 383 So.2d 956; Dept' of Transp., Div. of Risk Management v. Matthews, 386 So.2d 892 (Fla.App. 1980).
The Social Security Administration's interpretation of how the relevant federal and state statutes interact is set forth in its Claims Manual, which contains its operating instructions for adjudication. The manual, recognizing that Florida's workmen's compensation law provides for an offset, states that the § 224(a) reduction "is not applicable beginning with the month of adjudication." However, since the state offset is not effective until the receipt of the first federal disability benefit, the manual explains that the federal offset "is applicable after the month of notice up to (but not including) the month of adjudication."
Each of the appellees received an award of disability insurance under the Act. In addition to receiving benefits on a current basis beginning with the month of adjudication, appellees Bower and Weaver received lump-sum payments based on their eligibility for benefits prior to the month of adjudication. Appellee Swain received only a lump-sum award for a retroactive period.
Pursuant to its stated policy, the Social Security Administration imposed offsets ont he lump-sum amounts due to the appellees' receipt of payments under the Florida Workmen's Compensation Act during the periods reflected by their disability awards. An administrative law judge upheld the reductions. Administrative review before the Administration's Appeals Council affirmed the judge's decision and resulted in the final decision of the Secretary for which review was sought in the district court.
The district court reversed the Secretary's decision and ordered the Secretary to repay the federal benefits withheld from the appellees. It held that Florida law "provides for" an offset for purposes of § 224(d) so that the § 224(a) reduction should not apply.
In essence, the district court concluded that § 224(d) prohibits reduction of federal benefits where the workers' compensation plan allows reduction of the compensation during any of the time that an employee is entitled to disability benefits. It accepted the recommendation of a magistrate, who reported that the court should follow the decision in Traver v. Califano, Civ. No. 76-969 (M.D. Fla. Sept, 1977). Tarver had held:
The appellees, of course, support this interpretation. They argue that § 224(d) is categorical in its application since it does not address when the workers' compensation law must provide for the reduction of benefits or the amount of reduction that must be provided.
The appellees contend that the language of § 224(d) is unambiguous, so that there is no need to inspect the legislative history to determine the intent of Congress. Covering all bases, however, they contend that the legislative history supports their view. They argue that Congress was worried about the impact of the social security disability program on the workmen's compensation systems of the states. In their view, the purpose of § 224(d) is to secure to the states the economic benefits of reduced compensation payments when concurrent entitlement to disability benefits exists. Rather than requiring the Social Security Administration to monitor the payment of workmen's compensation benefits, they argue, Congress created a more expedient solution in which the Administration is only required to look to the law under which the compensation is paid to see if any offset exists.
We agree with the reasoning offered by the appellees and reject the interpretation adopted by the district court. The offset exception must be read in its entirety. It excepts a compensation law or plan that "provides for" a reduction "when anyone is entitled to" social security benefits. Prior to adjudication and he subsequent receipt of disability payments, a proper claimant is entitled to benefits even though they are not being received. Thus, to the extent that Florida law does not reduce workers' compensation until the receipt of social security benefits, it cannot be said that the state's plan "provides for" a reduction so as to make § 224(d) of the Act applicable. To the contrary, in such circumstances the offset of § 224(a) of the Act must apply.
Moreover, the statute must be considered as a whole, and the exception to the offset provision must be read in light of the purpose of the Act. See generally, C. Sands, 2A Statutes and Statutory Construction § 46.05 (4th ed. 1973). This broader analysis confirms the interpretation urged by the Secretary.
"[I]t is clear from the legislative history that the purpose of [§ 224(a)] is to prevent the payment of excessive combined benefits." Kananen v. Matthews, 555 F.2d 667, 670 (8th Cir. 1977) (citing S.Rep. 404, 89th Cong., 1st Sess., reprinted in  U.S. Code Cong. & Ad. News 1943, 2040). Such payment "was thought to cause two evils: first, it reduced a worker's incentive to return to the work place and hence impeded rehabilitation efforts; and second, it created fears that the duplication of benefits would lead to an erosion of state workers' compensation programs." Freeman v. Harris, 625 F.2d 1303, 1306 (5th Cir. 1980); accord, Richardson v. Belcher, 404 U.S. 78, 83 92 S.Ct 254,258, 30 L.Ed.2d 231 (1971). The interpretation of the district court here allows the very result Congress acted to prevent in § 224: the receipt of duplicative state and federal benefits.
The purpose of the § 224(d) offset exception in the scheme created by Congress seems only to have been the prevention of a double offset, so that federal and state plans would not both offset the benefits that were provided by each other. The Secretary's interpretation is consistent with the goal. Even if the offset exception was also intended to secure the states the economic benefits of reduced compensation payments, the Secretary's view is not incongruous.
The district court erred in its interpretation and application of § 224(d) of the Social Security Act; its decision is
 In relevant part, § 224(a) states:
 In a similar context, a commentator who has addressed the applicability of the federal offset provision to Minnesota's workmen's compensation law has agreed with the meaning which we take from the Act's language:
A. Larson, 4 The Law of Workmen's Compensation § 97.35 n.53 (1981).
 Another district court decision in this circuit relied on the purpose of the Act in rejecting the interpretation urged by the plaintiff there and the appellees here. Durrance v. Califano. [1979 Transfer Binder] Unempl. Ins. Rep. (CCH) ¶ 16,287 (S.D. Fla. 1978). In that case, the magistrate's report stated:
Id. (quoting S.Rep. 404, 89th Cong., 1st Sess., reprinted in  U.S. Code Cong. & Ad.News 1943, 2040).
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