APPEARANCES:

 

Claimant, Howard G. Lambert, Pro Se

 

Employer, Aluminum Products, Inc., by

Annan & Associates, per

Edgar L. Annan

 

Department of Labor and Industries, by

The Office of the Attorney General, per

Lisa Marsh, Assistant

 

            Docket No. 01 23275:  The employer, Aluminum Products, Inc., filed an appeal with the Board of Industrial Insurance Appeals on December 10, 2001 , from an order of the Department of Labor and Industries dated October 31, 2001 .  In the order, the Department affirmed its orders of May 18, 2001, May 21, 2001, June 4, 2001, June 18, 2001, July 2, 2001, July 16, 2001, July 30, 2001, August 13, 2001, August 28, 2001, September 10, 2001, September 24, 2001, October 8, 2001, and October 22, 2001. 

In its order of May 18, 2001 , the Department set aside and held for naught its order of February 23, 2001 , provided new earnings information for the claimant, and set a new monthly time-loss compensation benefit rate of $733.70.  In its orders of May 21, 2001 to October 22, 2001 , the Department paid time-loss compensation benefits for the period from May 1, 2001 through October 18, 2001 .  The Department order is REVERSED AND REMANDED.

Docket No. 01 23276:  The employer, Aluminum Products, Inc., filed an appeal with the Board of Industrial Insurance Appeals on December 10, 2001 , from an order of the Department of Labor and Industries dated November 19, 2001 .  In its order, the Department paid time-loss compensation benefits from November 2, 2001 through November 15, 2001 .  The Department order is REVERSED AND REMANDED.

 

DECISION

             Pursuant to RCW 51.52.104 and RCW 51.52.106, this matter is before the Board for review and decision on a timely Petition for Review filed by the employer to a Proposed Decision and Order issued on November 26, 2002 , in which the industrial appeals judge dismissed the orders of the Department dated October 31, 2001 and November 19, 2001 .  [2]

             By Order Granting Petition for Review dated February 3, 2003 , the public, business, and labor members of the Board agreed to review the Proposed Decision and Order.  After review was granted, the business member of the Board stepped down, leaving the position vacant, pending appointment of a new business member.  On July 11, 2003 , the two sitting Board members issued an order stating that a majority of the Board members did not agree on the final disposition of the Department orders on appeal.  The Board order noted that the business member position remained vacant and that the time limit for issuance of a final Board decision (per RCW 51.52.106) had expired.  Based on the lack of a Board majority to affirm or reverse the orders on appeal, the two Board members determined that the Department orders must stand, citing Department of Ecology v. Kirkland, 84 Wn.2d 25 (1974), and In re Herbert Thomas, BIIA Dec., 42,061 (1973).  The July 11, 2003 order noted that the disposition of the appeals did not foreclose further appeal and review in the courts, pursuant to RCW 51.52.110, RCW 51.52.115, and RCW 51.52.140.

             On July 30, 2003 , the employer filed a Notice of Appeal to the Superior Court of Spokane County (No. 03-2-04978-1).  On November 7, 2003 , the Superior Court issued an Agreed Order of Remand to the Board of Industrial Insurance Appeals.  In the Agreed Order, the Superior Court remanded the cause of action to this Board with direction to "issue a Decision and Order on this matter after consideration of briefs to be filed by all parties.  Such order shall contain findings and conclusions as to each contested issue of fact and law, as well as the Board's order based thereon."  11/7/03 Superior Court Order.  On December 4, 2003 , Board Executive Secretary David E. Threedy acknowledged the November 17, 2003 receipt of the Agreed Order and set a deadline of December 23, 2003 , for filing of any briefs.  The Department filed its brief on November 26, 2003 .  The employer's brief was placed in the United States Mail on December 22, 2003 , and received at the Board offices on December 24, 2003 .

             The Board has considered the entire record in this appeal, including the briefs filed by the employer and Department on remand from the Superior Court.  We have reviewed the evidentiary rulings in the record of proceedings and find that no prejudicial error was committed.  The rulings are affirmed.  We now address the employer’s contention that RCW 51.32.225 requires a dollar‑for‑dollar offset of social security retirement benefits against total disability benefits paid pursuant to Title 51.

             Initially, we must resolve an outstanding jurisdictional issue.  The August 13, 2001 time-loss compensation order (affirmed in the Department order of October 31, 2001 , and currently on appeal) was protested by the employer on October 26, 2001 , a date beyond the 60-day protest or [3] appeal period.  This Board may take notice of the contents of the Department's claim file to determine its jurisdiction.  In re Mildred Holzerland, BIIA Dec., 15,729 (1965).  The file shows that this order was sent to the employer’s lay representative rather than the employer’s attorney.  Therefore, the order was not properly served on the employer and the protest should be considered timely.  In re Bell & Bell Builders II, BIIA Dec., 90 5119 (1992).  This Board has jurisdiction to decide the correctness of the August 13, 2001 order.

             The facts material to this appeal are not in dispute.  Mr. Lambert was born on May 2, 1919 .  He began drawing periodic social security retirement benefits (SSRB) in March 1983.  In May 1984, at age 65, he started receiving regularly paid SSRB benefits.  He has never received social security disability benefits (SSDB).  Mr. Lambert operated his own business in 1984 and 1985 but, for much of the time until 1997, he and his wife lived on his SSRB.  In 1997, at age 78, he returned to the workforce to supplement his income, securing employment with Aluminum Products, Inc.  Mr. Lambert sustained an injury in the course of that employment on September 5, 2000 , and he has received time-loss compensation benefits since September 8, 2000 . 

             Debbie Brookman is a social security offset specialist for the Department, a position she has held since May 1998.  In that capacity, Ms. Brookman calculates State Fund time-loss compensation offsets for both SSRB and SSDB.  Her training was based on the policies and procedures contained in the Department's social security offset manual. 

             Ms. Brookman calculated, and recalculated, Mr. Lambert's SSRB offset on three occasions, February 13, 2001 , February 22, 2001 , and May 17, 2001 .  Board Exhibit No. 3, the Offset Computation Sheet, includes a chart showing the bases for each of the three calculations.  Initially, Ms. Brookman received little information from the social security Administration (SSA).  In early July 2003, shortly before the hearing in these appeals, she received from the SSA a response to her request for more information.

             In each of the calculations, Ms. Brookman used December 1, 2000 , as the effective date of offset.  The amount of SSRB used in each calculation ($696) was the total family benefit (TFB) as of the SSRB entitlement date (March 1983).  She calculated the TFB by taking information about Mr. Lambert's 1999 and 2000 SSRB benefits and subtracting the federal cost-of-living adjustments authorized since 1983.  Although Ms. Brookman performed this calculation herself, rather than obtaining the amount directly from the SSA, she believed it was fairly accurate, down to pennies.

             The February 14, 2001 Department order reflects Ms. Brookman’s February 13, 2001 calculation.  Mr. Lambert's time-loss rate, as of the December 1, 2000 offset effective date, was [4] $1,267.20.  Ms. Brookman described the method set forth in the Department’s manual for calculating the amount that a claimant’s time-loss compensation benefits will be offset by the claimant's SSRB. 

             The Department's procedures permit a total of time-loss compensation and SSRB not to exceed the highest of the following: 

·                                80 percent of the Average Current Earnings (ACE);

·                                the SSRB total family benefit alone; or

·                                time-loss compensation benefit alone. 

Ms. Brookman explained that the ACE typically is supplied by the SSA, which calculates the ACE pursuant to §424(a) of the federal social security statute.  The ACE, as calculated by the SSA, is the single highest income year out of the five consecutive years prior to retirement.  The SSA also will average any 5 years of income.  The social security disability benefits calculation uses the ACE to set the limit on the total of social security plus state workers' compensation benefits; the total can be no more than 80 percent of the ACE.  Because neither the SSA, nor the claimant, had provided earnings information to the Department, Ms. Brookman calculated 80 percent of ACE using $0 earnings.  The SSRB total family benefit ($696) became the offset amount, resulting in a new time‑loss rate of $571.20. 

             Ms. Brookman again calculated the SSRB offset on February 22, 2001 , after the claims manager adjusted Mr. Lambert's wage based on a determination that he was not a full-time employee at the time of injury.  His new time-loss rate, effective December 1, 2000 , was $733.70.  Ms. Brookman recalculated the benefit changing only the time-loss compensation rate, which resulted in an offset time-loss compensation rate of $37.30.  She issued the February 23, 2001 order, that superseded the February 14, 2001 order, and resulted in a $904 overpayment. 

             Ms. Brookman's third SSRB offset calculation was done on May 17, 2001 , in response to the claimant's protest to the February 23, 2001 order.  At this point, she had secured earnings information from Mr. Lambert, which she used to calculate the ACE.  The Department’s manual allows the specialist to use as the ACE the earnings from any year from the claimant's entire working history.  Ms. Brookman chose 1984, when Mr. Lambert’s earnings were $34,333.  Ms. Brookman determined that 80 percent of the ACE ($34,333) is $27,466.40.  This figure replaced the $0 used previously as 80 percent of the ACE when Mr. Lambert’s earnings were unknown.  Use of the 1984 earnings as the ACE established 80 percent of the ACE as a higher [5] value than the SSRB alone or the time-loss compensation benefit alone (the other potential sources of the maximum combined benefits amount).

             Dividing $27,466.40 by 12, Ms. Brookman calculated the monthly maximum total of SSRB benefits and time-loss compensation benefits ($2,288.87).  She subtracted the TFB of $696 from $2,288.87, leaving $1,592.87 as the maximum time-loss compensation benefits payable without triggering an offset.  Since Mr. Lambert's time-loss rate was only $733.70, no offset was taken. 

             In the employer’s post-hearing brief and Petition for Review, the employer relies on application of the law to the undisputed facts to present its prima facie case.  In his Proposed Decision and Order the industrial appeals judge improperly dismissed this appeal on grounds that the employer had not presented testimony "that a different calculation, or a different result, was required."  Proposed Decision and Order, at 8.  The evidence provides a sufficient factual basis to support the employer’s legal argument.  We now address the legal issue raised in this appeal.

             The employer relies primarily on our decision, In re Lois Oakley, BIIA Dec., 87 3830 (1989).  Oakley affirmed the Department’s dollar-for-dollar offset of SSRB in Lois Oakley’s claim, finding that to do so was within the Department’s authority pursuant to RCW 51.32.225.  The procedure used in Oakley was the same procedure used here.  Ms. Oakley was entitled to a total of time loss and SSRB benefits not to exceed the highest of the following:  80 percent of the average current earnings (ACE); the SSRB alone; or time-loss compensation alone.  In Oakley, the total combined amount was calculated identically to the first ( February 13, 2001 ) calculation in Mr. Lambert’s claim because in both cases, the claimants had not provided the Department with earnings information.  In both claims, $0 was used when calculating 80 percent of ACE; the ACE-derived number was the lowest of the three options; and the time-loss compensation rate was the highest of the three values.  The time-loss rate was used as the maximum combined benefit and the SSRB benefit was subtracted, dollar-for-dollar, bringing the benefit down to the maximum allowable. 

             In Oakley, we upheld the dollar-for-dollar subtraction of SSRB benefits:

Since we conclude that RCW 51.32.225 provides for the taking of a social security offset in the full amount of social security retirement benefits being received by the worker, we must comment on the question of the effect, if any, of the Department’s policy not to reduce temporary or permanent total disability benefits by the full amount of social security retirement benefits being received by the worker in all cases.  We believe that if the Department chooses to offset less than the full amount of social security retirement benefits being received by the worker, then it is required to establish procedures for doing so.  Such procedures must comply with the administrative rule-making requirements of RCW 34.04.  We believe it is questionable whether [6] the Department has the authority to offset less than the full amount of the social security retirement benefits being received by the claimant.

 

Oakley, at 14.  We declined to address the “questionable” practice, however, because the issue was not before us.  See also, In re Esther I. Rodriguez, Dckt. No. 88 0212 ( June 22, 1989 ), (issue was not reached). 

             The employer’s appeal in Mr. Lambert’s claim puts this question squarely before us.  The first Department calculation of Mr. Lambert’s offset, when his unknown wage was listed as $0, ruled out the ACE as the determiner of the maximum combined benefit.  Mr. Lambert's time-loss compensation benefit amount, as the highest of the three values, became the maximum combined benefit amount, requiring the dollar-for-dollar offset.  The subsequently-supplied wage information allowed the 80 percent of ACE to become the highest value.  Using this value as the determiner of the maximum combined benefit, the Department calculated a combined maximum that exceeded the combined total of Mr. Lambert's workers' compensation and SSRB benefits, and his SSRB offset dropped to $0.  We hold that the Department is without authority to apply RCW 51.32.225 in this fashion, with or without rulemaking. 

             RCW 51.32.225 authorizes the Department to offset SSRB from a worker’s total disability benefits.  It provides, in relevant part:

(1) For persons receiving compensation for temporary or permanent total disability under this title, the compensation shall be reduced by the department to allow an offset for social security retirement benefits payable under the federal social security, old age survivors, and disability insurance act, 42 U.S.C. This reduction shall not apply to any worker who is receiving permanent total disability benefits prior to July 1, 1986 .

(2) Reductions for social security retirement benefits under this section shall comply with the procedures in RCW 51.32.220(1) through (6), except those that relate to computation, and with any other procedures established by the department to administer this section.

 

The plain language of section (1) requires an offset for SSRB benefits, but does not specify whether a partial offset is permissible.  No method for calculating a less than dollar-for-dollar offset is provided.  Further, the statute explicitly prohibits the Department from computing the SSRB offset using the method set forth in RCW 51.32.220(1)-(6) ("Reductions in total disability compensation").  Based on court decisions post-Oakley, we conclude that RCW 51.32.225 requires that the Department offset the full dollar-for-dollar amount of SSRB against workers' compensation temporary or permanent total disability benefits. [7]

             Harris v. Department of Labor & Indus., 120 Wn.2d 461 (1993), is particularly instructive.  In Harris, the claimant's widow challenged the reduction of her husband's time-loss compensation benefits by the amount of his SSRB, pursuant to RCW 51.32.225.  On the effective date of the statute, Mr. Harris was 75 years old and was collecting both SSRB and state time-loss compensation.  The Department issued an order reducing Mr. Harris's workers' compensation payments "by the amount of Social Security retirement benefits he was receiving."  Harris, at 465.

             The Harris court addressed a variety of challenges to the statute, including whether it applied to the claimant, constitutional questions, and a federal pre-emption argument.  In the course of its analysis, the court focused on statutory history, noting that "[d]uring legislative debate, two major justifications for the [SSRB] offset emerged:  avoiding duplicative benefits and limiting the cost of industrial insurance."  Harris, at 465.  The statute "allows workers' compensation benefits to be reduced by the amount of Federal Social Security retirement benefits a worker receives."  Harris, at 467.

             In the course of her equal protection argument, Ms. Harris contended that the statute did not effectuate the statute's intent of eliminating duplicative benefits because the state and federal benefits are not duplicative.  The court disagreed:

State disability benefits and federal old-age Social Security benefits serve the same purpose:  to restore earnings due to wage loss.  The cause of wage loss‑‑whether it be old age, disability, or unemployment‑‑is irrelevant.

 

Harris, at 480.  The court concluded, "RCW 51.32.225 serves a legitimate purpose in avoiding duplication of benefits."  Harris, at 480. 

             Frazier v. Department of Labor & Indus., 101 Wn. App. 411 (2000), also concerned an injured worker whose SSRB were offset from his time-loss compensation, pursuant to RCW 51.32.225.  The Department applied a dollar-for-dollar offset.  Frazier quotes liberally from Harris regarding the purpose and intent of RCW 51.32.225.

             The Frazier court did not reach the issue of whether RCW 51.32.225 provides the Department with authority to use procedures that allow for a less than dollar-for-dollar offset of SSRB.  Mr. Frazier did argue "that the Department uses a computation different than a dollar‑for‑dollar offset in some cases," thereby invalidating the Department's calculation method.  Frazier, at 423.  In dicta, the court noted:

Frazier does not take issue with the fact that the actual reduction amounted to a dollar-for-dollar offset, which appears to be consistent with the plain language of RCW 51.32.225(1) (a worker's state [8] compensation "shall be reduced by the department to allow an offset for social security retirement benefits payable under . . . 42 U.S.C.")

 

Frazier, at 422, fn.1.  The court ultimately decided that, because the social security offset manual was not part of the record and the argument regarding inconsistent computation was not raised below, the court could not consider it.  The cited footnote from the Frazier decision, while dicta, is nonetheless consistent with our opinion in this matter.

             We conclude that the Department’s method for calculation of SSRB offsets is contrary to the intent of RCW 51.32.225.  With or without an agency rule, the Department lacks statutory authority to assess social security retirement benefit offsets of workers' compensation total disability benefits in amounts less than dollar-for-dollar.

FINDINGS OF FACT

 

1.         On September 13, 2000 , the claimant, Howard G. Lambert, filed an application for benefits with the Department of Labor and Industries, alleging an industrial injury on September 5, 2000 , to his right elbow during the course of his employment with Aluminum Products, Inc.  The Department issued an order allowing the claim on December 1, 2000 .  Time-loss compensation benefits were paid continuously for the period September 8, 2000 through November 19, 2001 .

 

            On December 18, 2000 , the employer filed a Protest and Request for Reconsideration with the Department of any adverse orders.  On January 16, 2001 , the Department issued an order stating that it was reconsidering its order of December 1, 2000 (which allowed the claim) and December 15, 2000 (which paid a period of time-loss compensation).  On January 29, 2001 , the employer filed a Protest and Request for Reconsideration with the Department of the time-loss compensation rate and all time-loss compensation orders.

 

            On February 14, 2001 , the Department issued an order adjusting the claimant's time-loss compensation rate due to a social security offset, assessed an overpayment, and set a repayment rate.  On February 23, 2001 , the Department issued an order correcting and superseding its order of February 14, 2001 .  The order adjusted the claimant's time-loss compensation rate due to a change in reported wages, assessed an overpayment, and set a new repayment rate. 

 

            On February 26, 2001 , the Department issued an order assessing an overpayment of time-loss compensation benefits because of a change in the claimant's reported gross income.  On March 7, 2001 , the claimant filed a Protest and Request for Reconsideration with the Department of its order of February 26, 2001 .  On April 12, 2001 , the claimant filed a Protest and Request for Reconsideration with the Department of its order of February 23, 2001 . [9]

 

            On May 18, 2001 , the Department issued an order that set aside and held for naught its order of February 23, 2001 .  The order set the claimant's time-loss compensation benefit rate at $733.70 per month, with no social security offset, based on the claimant's 1984 earnings of $34,333; repaid the claimant for previous deductions for overpayments; and stated that future time-loss compensation benefits would be paid at this new rate.  The employer received the Department's order of May 18, 2001 , no earlier than May 31, 2001 .  On July 26, 2001 , the employer filed a Protest and Request for Reconsideration with the Department of its order of May 18, 2001 , May 21, 2001 , June 4, 2001 , and any subsequent orders that fail to take a social security offset.  On August 10, 2001 , the employer filed a Protest and Request for Consideration of Department orders dated June 18, 2001 , July 2, 2001 , and July 16, 2001 .  An August 13, 2001 order was mailed by the Department to the employer’s lay representative, rather than the employer’s attorney of record.

 

The employer filed Protests and Requests for Reconsideration within 60 days of communication of the Department orders dated May 18, 2001, May 21, 2001, June 4, 2001, June 18, 2001, July 2, 2001, July 16, 2001, July 30, 2001, August 13, 2001, August 28, 2001, September 10, 2001, September 24, 2001, October 8, 2001, and October 22, 2001.  These orders collectively paid time-loss compensation benefits from May 1, 2001 through October 18, 2001 .

 

            On October 31, 2001, the Department issued an order affirming its orders of May 18, 2001, May 21, 2001, June 4, 2001, June 18, 2001, July 2, 2001, July 16, 2001, July 30, 2001, August 13, 2001, August 28, 2001, September 10, 2001, September 24, 2001, October 8, 2001, and October 22, 2001.  On November 19, 2001 , the Department issued an order awarding time‑loss compensation benefits for the period from November 2, 2001 through November 15, 2001 .  On December 10, 2001 , the employer filed a Notice of Appeal with the Board of Industrial Insurance Appeals of the Department's orders of October 31, 2001 and November 19, 2001 .  On January 8, 2002 , the Board issued an order granting the appeal to the order of October 31, 2001 , assigning the appeal Docket No. 01 23275, and directing that proceedings be held.  Also on January 8, 2002 , the Board issued an order granting the appeal to the order dated November 19, 2001 , assigning the appeal Docket No. 01 23276, and directing that proceedings be held.  The appeals were consolidated for decision.

 

A Proposed Decision and Order was issued on November 26, 2002 , in Docket Nos. 01 23275 and 01 23276.  On January 13, 2003 , the employer filed a Petition for Review of the Proposed Decision and Order.  By Order Granting Petition for Review dated February 3, 2003 , the public, business, and labor members of the Board agreed to review [10] the Proposed Decision and Order.  After review was granted, the business member of the Board stepped down, leaving the position vacant pending appointment of a new business member.  On July 11, 2003 , the two sitting Board members issued an order stating that a majority of the Board members did not agree on the final disposition of the Department orders on appeal.  The order noted that the business member position remained vacant and that the time limit for issuance of a final Board decision (per RCW 51.52.106) had expired.  Based on the lack of a Board majority to affirm or reverse the orders on appeal, the two Board members determined that the orders must stand, citing Department of Ecology v. Kirkland, 84 Wn.2d 25 (1974), and In re Herbert Thomas, BIIA Dec., 42,061 (1973).  The July 11, 2003 order noted that the disposition of the appeals did not foreclose further appeal and review in the courts, pursuant to RCW 51.52.110, RCW 51.52.115, and RCW 51.52.140.

 

On July 30, 2003 , the employer filed a Notice of Appeal to the Superior Court of Spokane County (No. 03-2-04978-1).  On November 7, 2003 , the Superior Court issued an Agreed Order of Remand to the Board of Industrial Insurance Appeals.  The Agreed Order remanded the cause of action to this Board with direction to "issue a Decision and Order on this matter after consideration of briefs to be filed by all parties.  Such order shall contain findings and conclusions as to each contested issue of fact and law, as well as the Board's order based thereon." 

 

2.         The claimant, Howard G. Lambert, was born on May 2, 1919 .  He began drawing periodic social security retirement benefits (SSRB) in March 1983.  In May 1984, at age 65, he started receiving regularly paid SSRB benefits.  He has never received social security disability benefits (SSDB).  Mr. Lambert operated his own business in 1984 and 1985 but, for much of the time until 1997, he and his wife lived on his SSRB. 

 

3.         In 1997, at age 78, Mr. Lambert returned to the workforce to supplement his income, securing employment with Aluminum Products, Inc.  Mr. Lambert sustained an injury in the course of that employment on September 5, 2000 , and he has received time-loss compensation since September 8, 2000 . 

 

4.      The Department calculated, and recalculated, Mr. Lambert's SSRB offset on three occasions, February 13, 2001 , February 22, 2001 , and May 17, 2001 .  Initially, the Department received little information from the Social Security Administration (SSA).  In early July 2003, shortly before the hearing in these appeals, the SSA responded to the Department’s request for additional wage information.

 

5.      December 1, 2000 , is the effective date of social security offset.  Mr. Lambert's time-loss rate, as of the December 1, 2000 offset effective date, was $1,267.20. The amount of SSRB used in each of the three [11] calculations ($696) was the total family benefit (TFB) as of the SSRB entitlement date (March 1983).   

 

6.         The Department's social security offset manual allows a claimant to receive a total of time-loss compensation and SSRB not to exceed the highest of the following:  80 percent of the average current earnings (ACE); the SSRB total family benefit alone; or time-loss compensation benefit alone.  The ACE typically is supplied by the SSA, which calculates the ACE pursuant to §424(a) of the federal social security statute.  Because neither the SSA, nor the claimant, had provided earnings information to the Department, 80 percent of the ACE was calculated using $0 earnings.  In the first calculation of Mr. Lambert’s SSRB offset, reflected in the February 14, 2001 order, his SSRB total family benefit ($696) became the offset amount.  Subtracted from the initial rate of $1,267.20, the offset resulted in a new time-loss rate of $571.20. 

 

7.         The Department next calculated the SSRB offset on February 22, 2001 , because Mr. Lambert's wage was adjusted based on a determination that he was not a full-time employee at the time of injury.  The resulting time-loss compensation rate, effective December 1, 2000 , was $733.70.  The benefits were recalculated changing only the time-loss compensation rate, which resulted in an offset time-loss compensation rate of $37.30.  This calculation is reflected in the February 23, 2001 order, which superseded the February 14, 2001 order, and resulted in a $904 overpayment. 

 

8.         The Department’s third SSRB offset calculation took place on May 17, 2001 , in response to the claimant's protest to the February 23, 2001 order.  At this point, Mr. Lambert had provided earnings information, which was used to calculate the ACE.  The Department’s procedures allow the use of earnings from any year from the claimant's entire working history as the ACE.  In Mr. Lambert’s case, 1984 was chosen.  During 1984, Mr. Lambert’s earnings were $34,333.  Eighty percent of the ACE ($34,333) is $27,466.40.  The Department used this amount in place of the $0 used as 80 percent of the ACE when Mr. Lambert’s earnings were unknown.  Use of the 1984 earnings as the ACE established 80 percent of the ACE as a value higher than the SSRB alone or the time-loss compensation benefit alone (the other potential sources of the maximum combined benefits amount).  Dividing $27,466.40 by 12, the Department calculated the monthly maximum total of SSRB benefits and Department benefits ($2,288.87).  The TFB of $696 was subtracted from $2,288.87, leaving $1,592.87 as the maximum time-loss compensation benefits payable without triggering an offset.  Since Mr. Lambert's time-loss rate was only $733.70, no offset was taken.  This final calculation is reflected in the May 18, 2001 Department order. [12]

 

CONCLUSIONS OF LAW

1.         The Board of Industrial Insurance Appeals has jurisdiction over the parties to and the subject matter of these appeals.

 

2.         RCW 51.32.225 requires that the Department take a full dollar-for-dollar offset of retirement benefits from total disability benefits paid.

 

3.         The orders of the Department dated October 31, 2001 (Docket No. 01 23275) and November 19, 2001 (Docket No. 01 23276), are incorrect and are reversed.  This claim is remanded to the Department with direction to take a dollar-for-dollar offset of Mr. Lambert’s  retirement benefit from his total disability benefits, retroactive to the effective offset date of December 1, 2000; and to take such further action as indicated or required by law.

 

            It is so ORDERED.

 

            Dated this 2nd day of February, 2004.

 

                                                                              BOARD OF INDUSTRIAL INSURANCE APPEALS

 

 

 

                                                                              /s/_____________________________________

                                                                              THOMAS E. EGAN                                   Chairperson

 

 

                                                                              /s/_____________________________________

                                                                              CALHOUN DICKINSON                                   Member