P O BOX 8126, MADISON, WI 53708-8126 (608/266-9850)




Claim No. 92000536

An administrative law judge (ALJ) for the Worker's Compensation Division of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.

The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and order in that decision as its own, except that it makes the following modifications:

1. Delete the fifteenth paragraph of the ALJ's Findings of Fact and substitute:

"Gagnon-Palick was awarded social security disability benefits by the Social Security Administration. The employer and its insurer have submitted completed forms WKC-6156 `Social Security Information Request' and WKC-6119 `Social Security Reverse Offset Worksheet.' It appears from these documents that the payment of social security disability benefits between June 1992 and September 1994 has resulted in a `reverse offset,' in turn causing a lower weekly compensation rate creating an overpayment of temporary disability compensation. The department shall calculate the amount of the overpayment, and issue an appropriate order to provide for a deduction of the amount of the overpayment from the applicant's award for vocational rehabilitation benefits under Wis. Stat. 102.43 (5) and 102.61."

2. Delete the ALJ's interlocutory order and substitute the second, third and fourth paragraphs of the commission's INTERLOCUTORY ORDER set out below.

NOW, THEREFORE, the Labor and Industry Review Commission makes this


The Findings of Fact and Interlocutory Order of the Administrative Law Judge are amended to conform to the foregoing and, as amended, are affirmed.

As of the date of the hearing, February 17, 1997, the employer and its insurer are liable to the applicant for compensation under Wis. Stat. 102.43 (5) and 102.61, in the accrued amount of Five Thousand four hundred fifty-one dollars and six cents ($5,451.06). Thereafter, the employer and its insurer remain liable for weekly rehabilitation benefits under Wis. Stat. 102.43 (5) and 102.61, less a twenty percent attorney fee, as long as the applicant is a student in good standing in the elementary education program authorized by DVR. However, the employer and its insurer are entitled to a credit against this liability for an overpayment caused by a reverse social security offset. This matter is remanded to the department for calculation of the amount of the overpayment, and to determine how it shall be recovered from the amount of the compensation due under this order.

Within 21 days of the date of this order, as amended, the employer and its insurer shall pay to the applicant's attorney, William Hickmann, the sum of One thousand three hundred sixty-two dollars and seventy-seven cents ($1,362.77) in attorney fees accrued to February 17, 1997. Thereafter, employer and its insurer shall pay Mr. Hickmann, an amount equal to twenty percent of their weekly liability to the applicant under Wis. Stat. 102.43 (5) and 102.61, without deduction for any overpayment or credit to be applied against that liability as determined by the department.

This matter is remanded to the department for further action in accordance with this decision. Jurisdiction is reserved for such further findings and award as may be warranted.

Dated and mailed August 27, 1997
gagnoja.wmd : 101 : 5   ND 5.40  5.35

Pamela I. Anderson, Chairman

David B. Falstad, Commissioner


At issue at the hearing was the applicant's eligibility for vocational rehabilitation benefits under Wis. Stat. 102.43 (5) and 102.61. After his injury, the applicant applied for services with DVR (1).    DVR certified the applicant for retraining to obtain a baccalaureate degree in elementary education.

Generally, once DVR certifies an injured worker for retraining, the department and the commission normally must accept that certification absent abuse of administrative power by DVR or a finding that material facts were withheld from DVR. Massachusetts Bonding & Insurance Corp. v. Industrial Commission, 275 Wis. 505, 512 (1957). Once a worker is certified, then, he is normally entitled to maintenance benefits during retraining under Wis. Stat. 102.61 and compensation is paid at the temporary total disability rate under Wis. Stat. 102.43 (5), at least for the first 80 weeks (2)   of retraining. In this case, prior to the hearing, the employer's insurer paid compensation at the temporary total disability rate for the first 80 weeks of the applicant's vocational retraining.

At the hearing, though, the employer and its insurer (collectively, the respondent) assert that they should not have to pay for retraining beyond 80 weeks. The department and the commission have more authority to act on that issue. Without going into elaborate analysis, the commission generally will pay for retraining after 80 weeks if the program is reasonable. In making that determination, a worker's age, ability and prior vocation are important, but the overriding consideration is whether the retraining will restore a worker's earning capacity and potential, as opposed to enhancing it. On the one hand is the concern that an employer should not have to pay to make a worker's earning potential better than it was before his injury. The competing concern, of course, is that in deciding whether a course of retraining is reasonable, the commission must look at earning capacity and potential, not just date of injury wages. See Wis. Admin. Code DWD 80.49 and Beloit Corp. v. LIRC, 152 Wis. 2d 594-595 (Ct. App., 1989).

The ALJ concluded the elementary education retraining was reasonable. He noted the respondent had already paid the first eighty weeks, presumably because DVR processed the applicant's case in a meticulous fashion. He also noted that the applicant's post-training starting wage of under $16.00 per hour compared favorably to his pre-injury wage of just under $18.00 per hour, in terms of restoring rather than enhancing the applicant's earning capacity.

In its brief arguing against benefits beyond 80 weeks, the respondent notes that the applicant is subject to a pending charge of carrying a concealed weapon which might result in a conviction rendering the applicant ineligible for a teaching job. It also notes that the applicant himself picked out the teaching program, and that DVR did not conduct its own job search but relied on the applicant's efforts under the state's unemployment insurance program.

As the ALJ points out, whether the applicant will be convicted of the concealed weapon charge or a lesser charge, let alone what the impact of such a conviction would be on his employability, is entirely speculative. The employer only provided hearsay to the effect that DPI (3)   might deny a license to a person convicted of carrying a concealed weapon. Further, the fact that teaching is something the applicant is interested in should not weigh against him in deciding whether it is a reasonable course of training. Moreover, while the law requires DVR to determine whether suitable employment is already available prior to certifying a retraining program, it does not require DVR to do its own job search to make that finding. Wis. Admin. Code DWD 80.49 (9). Finally, if the employer strongly believed that some other retraining program would have been better, or that suitable employment was already available for the applicant in his labor market, it could have provided expert testimony to that effect. It did not. The commission therefore affirmed the ALJ's award of vocational rehabilitation benefits beyond eighty weeks.

To its credit, the respondent admits the primary focus of its appeal is not about whether vocational rehabilitation benefits should have been limited to 80 weeks. See its March 20, 1997 petition for commission review. Rather, the employer is primarily interested in recouping the overpayment caused by the social security offset.

The law provides for an offset of worker's compensation disability benefits based on social security payments under a somewhat complicated formula. Wis. Stats. 102.44 (5). The formula depends on the applicant's monthly social security benefit, when he received the benefits, as well as a figure for "80% of average current earnings (ACE)." This information must come from the social security administration, on a form completed in part by the applicant.

In this case, the employer contends it was unaware until the date of hearing that the applicant had received social security benefits. Apparently, on the date of the hearing, February 11, 1997, (4)   the employer had the applicant complete his part of the form and forwarded it to the social security administration before the hearing. The SSA returned the form on February 18, and by letter dated February 20, 1997, the employer provided the form to the ALJ for consideration in fixing the award.

The forms seem to indicate that applicant received temporary total disability during nearly two years during which a reverse social security offset applied, resulting in an overpayment of temporary total disability benefits. Indeed, the commission estimates that the amount of the overpayment is substantially greater than the amount of the accrued vocational rehabilitation benefits awarded by the ALJ. However, while ALJ Phillips did not issue his order until March 7, 1997, his order does not reflect any deduction for the overpayment caused by the social security offset.

The respondent, understandably, does not wish to pay a lump sum for the accrued vocational rehabilitation award before the amount of the overpayment of temporary total disability due to the social security offset is determined. If the respondent makes a lump sum payment, it potentially loses its best chance at actually recovering the overpayment. Neither the commission nor the department has any authority to order the repayment of benefits overpaid in any manner other than withholding benefits due. Marla Sandridge v. DILHR v. Mid American Long Distance, WC claim no. 89023179 (the commission, July 17, 1996). Consequently, the applicant is eligible for vocational rehabilitation benefits as calculated by the ALJ. The commission orders that no amounts need actually be paid until the department calculates the amount due in light of the social security offset and remands this case to the department to make the appropriate calculations.



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(1)( Back ) The division of vocational rehabilitation, which prior to July 1, 1996 was a subunit of the state department of health and social services.

(2)( Back ) This was 40 weeks for injuries prior to the effective date of 1993 Wis. Act 370.

(3)( Back ) The state department of public instruction

(4)( Back ) The commission assumes the applicant misdated his signature as January 11, rather than February 11, on the form.