A Kentuckian whose workers’ compensation disability benefits were reduced because she also qualifies for Social Security challenged the constitutionality of the change before the state’s high court.
FRANKFORT, Ky. (CN) — Kentucky residents hurt on the job after they become eligible for Social Security are treated unfairly under a state law intended to prevent the duplication of so-called income replacement benefits, a Kroger employee argued Wednesday before the state’s top court.
Cheryl Cates worked for the grocery store chain for over 17 years but was forced to undergo shoulder replacement surgery in 2015 after she was injured at work. She was 66 at the time of her injury, and was awarded permanent partial disability benefits in the amount of $113,616.12 by an administrative law judge in 2018.
Kroger disputed the award, arguing a 2018 amendment to the Kentucky Workers’ Compensation Act should reduce the benefits awarded by four and a half years, or over $58,000, because Cates is also the recipient of Social Security benefits.
A state appeals court agreed and ruled the amendment is constitutional because it is designed to “prevent duplication of benefits and [provide] savings for the workers’ compensation system.”
Cates appealed to the Kentucky Supreme Court, and while several other people filed similar cases with the court, hers was chosen for oral arguments and to decide the constitutionality of the law.
In her brief to the court, Cates disputed the classification of her Social Security benefits as “income replacement.”
“Retirement benefits that are paid to an individual while they are still earning their full wages cannot logically be classified as ‘income replacement benefits,'” her brief states.
She further argued Social Security cannot reasonably be considered a government benefit at all, given that employees and employers pay into the system over the course of an employee’s tenure with a company.
“Those who qualify are entitled to receive their retirement benefits as a matter of law, whether private or public,” the brief said. “Why should there be a workers’ compensation system which penalizes older workers because of their earned retirements?”
Kentucky Attorney General Daniel Cameron, who was added as a party when the case arrived at the supreme court, said in his brief that the 2018 amendment is more lenient than previous iterations and allows a claimant to receive workers’ compensation benefits until the age of 70.
Cameron emphasized the current version of the law does not even mention Social Security benefits, and while he admitted it does not completely eliminate duplicative benefit payments, he pointed out that “neither the federal nor the state equal-protection clause requires a perfect fit between a statute’s means and the ends that the statute seeks to accomplish.”
Both Cameron and Kroger cited the Kentucky Supreme Court’s 2017 ruling in Parker v. Webster County Coal in their briefs, a case that dealt with a previous version of the statute challenged by Cates.
In its brief, Kroger argued there is a rational basis for the commonwealth to treat older workers differently than others who apply for workers’ compensation benefits, a point emphasized in the Parker decision.
“The court has held the commonwealth has a legitimate interest in avoiding duplicative forms of income replacement benefits so as not to make it more profitable for an injured worker to be disabled,” the brief states.
Attorney Jeff Roberts argued Wednesday on behalf of Cates, and told the court the loss of more than $58,000 in benefits would cause massive strain for his client, who worked past her retirement age out of financial necessity.
“I think everyone would agree,” Roberts said, “that the 2018 version of the statute clearly discriminates against older workers.”
The attorney disputed Kentucky’s rational basis reasoning, citing statistics that workers’ compensation premiums for employers have decreased continually over the past several years.
Attorney Sharlott Higdon argued on behalf of Kroger, telling the judges the age limit on benefits “allows for an even-handed treatment” of all older workers.
She compared the statute to the method by which future earnings damages are calculated in civil tort cases, and argued that “70 is a reasonable age that most people cease working.”
Arguing on behalf of the commonwealth, attorney Matt Kuhn from the Kentucky Attorney General’s Office reiterated the high court’s decision in Parker controls the outcome of the current dispute. Kuhn said the General Assembly followed the “roadmap” established by Parker when it made changes to the Workers’ Compensation Act, and cured any equal protection issues when it implemented the age limit.
Justice Michelle Keller asked whether Social Security benefits are truly duplicative under the statute, and admitted Kuhn’s counterpart made a compelling argument they are not income replacement benefits if Cates continues to work.
“Our position,” Kuhn said, “is that this court resolved those issues definitively in Parker.”
Although he admitted that some individuals may be slighted by the implementation of the age limit, Kuhn argued that “rational basis does not have to include mathematical niceties.”
In his rebuttal, Roberts pointed out the 65-74 age group is the fastest growing demographic in the U.S. workforce, perhaps in an effort to remind the court that the issues faced by his client won’t go away anytime soon.
The court did not set a timetable for its decision.