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GM can offset workers comp benefits with Social Security disability

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The Michigan Supreme Court has ruled that General Motors Co. can offset a retired employee's workers compensation benefits with Social Security disability insurance benefits despite the timing of a collective bargaining agreement between automakers and the UAW.

Clifton M. Arbuckle began collecting disability pension benefits in May 1993 after injuring his back while he was working for then-General Motors Corp. He retired from the Detroit-based automaker later that same month and soon after began receiving workers comp benefits for his injury. He also received Social Security Disability Insurance, court documents said.

In a Letter of Agreement written in 1990 between GM and the United Automobile Workers of America, GM agreed not to coordinate workers comp benefits with disability benefits for its employees, said court filings.

However in 2009, GM and the UAW agreed to a formula that would allow GM to use disability pension benefits to reduce workers comp benefits for all workers, including retirees, according to legal records.

Court documents also reported a change in 1982 to state law that allowed employers to reduce workers compensation benefits by coordinating those benefits with the employee's disability pension benefits.

When Mr. Arbuckle was informed in 2010 that his benefits would be reduced from $362.78 a week to $264.96, using a formula from the 2009 decision between GM and the UAW, the retiree requested a hearing with the Michigan Workers' Compensation Agency, which decided that GM was in violation of the agreement that took place in 1990, stating GM would not reduce benefits under these circumstances and GM had no authority to do so, said court files.

The Michigan Compensation Appellate Commission reversed the decision in part, stating GM was allowed to reduce disability pension benefits for the retiree. Mr. Arbuckle requested an appeal to the decision, and the Michigan Court of Appeals reversed and remanded the case, according to court documents, saying that GM could not coordinate Mr. Arbuckle's benefits.

GM appealed that decision to the Michigan Supreme Court, which ruled 7-0 Friday that the 2009 Letter of Agreement permitted the “coordination of benefits for all retirees who retired prior to Jan. 1, 2010, regardless of their date of retirement or injury.”

While the 1990 Letter of Agreement did not allow the coordination, nothing in the letter demonstrated that GM needs to provide Mr. Arbuckle an “unalterable right to uncoordinated benefits,” the Supreme Court wrote in its opinion, adding that the Court of Appeals erred by holding that GM lacked the authority to coordinate benefits.