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Tyson v. Workers' Compensation Appeal Board11/17/2005
Mervyn Tyson (Claimant) petitions for review of the decision of the Workers' Compensation Appeal Board (Board) which affirmed as modified the order of a Workers' Compensation Judge (WCJ) granting Claimant's claim petition. Claimant contends the Board erred in modifying the WCJ's order by awarding the City of Philadelphia (Employer) a credit against Claimant's workers' compensation award for the gross amount of his unemployment compensation (UC) benefits. We affirm.
In July 2002, Claimant filed a claim petition alleging he sustained a work-related injury to his lower back. Claimant further alleged he became fully disabled as of July 3, 2002. Employer filed an answer denying Claimant's allegations.
At some unspecified point thereafter, Claimant applied for UC benefits. In January 2003, Claimant began receiving $324.00 a week in UC benefits.
Later, the WCJ awarded Claimant workers' compensation for total disability in the amount of $333.33 a week retroactive to July 3, 2002.
On appeal, the Board affirmed the award of benefits but modified the WCJ's decision by granting Employer a credit for the gross amount of Claimant's UC benefits received from January 6, 2003. The Board recognized Section 204(a) of the Workers' Compensation Act (Act) permits an employer to receive an offset for any UC benefits a claimant received during the same period he received workers' compensation benefits. Claimant's petition for review followed.
Claimant contends the Board erred in granting Employer a credit for the gross amount rather than the net amount of his UC benefits. He argues the Department of Labor and Industry's (Department) regulations interpreting Section 204(a) of the Act specify the offset for UC benefits be calculated using the net amount of UC benefits received.
In Ferrero v. Workers' Comp. Appeal Bd. (CH & D Enters), 706 A.2d 1278 (Pa. Cmwlth. 1998), we addressed an issue similar to the one presented here. The claimant in Fererro argued the WCJ erred in awarding the employer a credit under Section 204(a) of the Act for the gross amount of UC benefits he received during the period of his work-related disability. Specifically, the claimant asserted the employer was entitled to credit only for the net amount of his UC benefits after his state and federal taxes were paid. In rejecting this argument, the Court, through President Judge Colins, wrote:
As noted by the Board, in the case of benefits, the "amount so received" is the gross amount. Because no taxes are withheld from UC benefits, Fererro received the gross amount and had the gross amount available for his use even though it was later taxed.
We agree with the Board's conclusion that applying the offset to the net amount of UC benefits would create unnecessary administrative problems. The UC benefits are not taxed until year end, and the amount of tax will vary depending on the employee's tax bracket, deductions and filing status. Furthermore, as we have noted in the context of subrogation, that workers' compensation benefits are exempt from income taxation and UC benefits are not so exempt is a matter of federal policy. Our General Assembly is presumably aware of the taxability of these benefits and it did not specify offset of the "net" amount of UC benefits.
706 A.2d at 1279 (emphasis added, footnote omitted).
Claimant acknowledges our decision in Fererro. He asserts, however, the Court was presumably unaware of the Department's regulations at the time it decided Fererro.
The Court in Fererro interpreted the Act. As this source of law is preeminent, regulations alone will not support a contrary result. Ne
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