The opinion of the court was delivered by: Johnny J. Butler, Judge
Submitted: October 21, 2011
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE JOHNNY J. BUTLER, Judge
Rose White (Claimant) petitions for review from the March 24, 2011 order of the Workers‟ Compensation Appeal Board (Board) affirming the determination of a Workers‟ Compensation Judge (WCJ) denying and dismissing Claimant‟s petition to review her benefit offset. The issues before this Court are: 1) whether the "old age" offset provision provided for in Section 204(a) of the Workers‟ Compensation Act (Act)*fn1 violates Article I, Section 1 of the Pennsylvania Constitution*fn2 on the basis of age;*fn3 and 2) whether the City of Pittsburgh (Employer) met its burden of proving the source of benefits against which it took an offset pursuant to Section 204(a) of the Act. For the reasons that follow, we affirm the order of the Board.
Claimant sustained an injury in the course of her employment on November 2, 1996, and began receiving workers‟ compensation benefits. Employer filed a Notice of Workers‟ Compensation Benefit Offset (Notice of Offset) on August 27, 2007, notifying Claimant that as a result of her receipt of Social Security old age benefits, it would begin taking a 50% offset of her Social Security benefits starting September 17, 2007. On October 25, 2007, Claimant filed a petition requesting review of the offset being taken by Employer. Claimant alleged that Employer was not entitled to an offset for 50% of the entire amount of her Social Security benefits because a portion of the amount she receives is a widow benefit attributable to her husband‟s earnings, or annual cost of living increases in her Social Security benefits.
A hearing was held before the WCJ and, on April 29, 2009, the WCJ issued an order denying Claimant‟s petition. The WCJ concluded that Employer established its entitlement to 50% of the entire amount of Claimant‟s Social Security benefits whether the benefits are based on Claimant‟s earnings or her increased benefit as a surviving spouse. The WCJ reasoned that there is nothing in the Act or in Section 123.7 of the Board‟s Regulations, 34 Pa. Code § 123.7,*fn4 that provides for reducing an offset by the amount of widow benefits or cost of living adjustments. The WCJ also determined that, even if the offset were based only on Claimant‟s earnings, there was nothing in the record indicating that Claimant‟s Social Security benefits increased when her husband died, nor a Certificate of Election from the Social Security Administration indicating that she elected to receive widow benefits.
Claimant appealed to the Board. The Board affirmed the WCJ‟s decision, noting that the WCJ had weighed the evidence of record and afforded more weight to the evidence supporting the conclusion that Employer met its burden of proof. Claimant appealed to this Court.*fn5
Claimant argues that the old age benefit offset provided for in Section 204(a) of the Act violates the equal protection requirement of the Pennsylvania Constitution. Specifically, she contends it imposes an unequal burden on the indemnity benefits of a claimant solely on the basis of age because only old age Social Security benefits may be offset.*fn6 Further, she argues that the Section 204(a) offset distinguishes between claimants over the age of 62 or 65, depending on when the injured worker receives old age benefits, and claimants under the age of 62 or 65, who are not entitled to old age benefits. Finally, she contends that Kramer v. Workers' Compensation Appeal Board (Rite Aid Corp.), 584 Pa. 309, 883 A.2d 518 (2005) can be distinguished from the case at bar because the severance offset is determined differently than the old age offset, and Social Security income is not wage loss replacement.
Section 204(a) of the Act states, in relevant part:
Fifty per centum of the benefits commonly characterized as "old age‟
benefits under the Social Security Act (49 Stat. 620, 42 U.S.C. § 301
et seq.) shall also be credited against the amount of the payments
made under sections 108*fn7 and 306,*fn8
except for benefits payable under section 306(c):*fn9
Provided, however, That the Social Security offset shall not apply if old age Social Security benefits were received prior to the compensable injury.
Article I, Section 1 of the Pennsylvania Constitution states: "All men are born equally free and independent, and have certain inherent and indefeasible rights, among which are those of enjoying and defending life and liberty, of acquiring, possessing and protecting property and reputation, and of pursuing their own happiness."*fn11 Pa. Const. art I, § 1. The basic principles governing an equal protection challenge are delineated in Curtis v. Kline, 542 Pa. 249, 666 A.2d 265 (1995):
The essence of the constitutional principle of equal protection under the law is that like persons in like circumstances will be treated similarly. However, it does not require that all persons under all circumstances enjoy identical protection under the law. The right to equal protection under the law does not absolutely prohibit the Commonwealth from classifying individuals for the purpose of receiving different treatment, and does not require equal treatment of people having different needs. The prohibition against treating people differently under the law does not preclude the Commonwealth from resorting to legislative classifications, provided that those classifications are reasonable rather than arbitrary and bear a reasonable relationship to the object of the ...