Employer Not Allowed To Reduce Disability Benefits By Amount Received From Social Security

Jonathan McCaffrey is a police officer employed by the Town of East Fishkill, New York. McCaffrey was injured in a motor vehicle accident in the course of his duties. The Town continued to pay McCaffrey his normal salary pursuant to New York State police officer disability law. However, when McCaffrey applied for and began to receive Social Security disability insurance (SSDI) benefits, the Town reduced its salary payments to him by the amount he was receiving in SSDI.

McCaffrey sued the Town, contending that it had no right to offset his salary by SSDI benefits. A New York appeals court agreed with McCaffrey.

The Court found that New York’s statutory scheme for the payment of disability payments to police officers specifically addressed the issue of benefits from other sources by allowing the termination of an officer’s normal salary only in certain circumstances. McCaffrey’s case involved a provision of the law that allowed the Town to discontinue its payments if a law officer received benefits from a “similar accidental disability pension” to that provided by the pension fund of which he or she is a member.

The Court decided that SSDI benefits “do not constitute an accidental disability pension similar to the statutory allowance provided for in New York State law.”

In the Court’s judgment, “SSDI benefits are different from New York’s disability payments. In addition to being a creature of federal, not state, law, the SSDI program is not a pension program, it is an insurance program. Its benefits are available not only to members, but are paid, upon application, to every individual not yet of retirement age who is insured for disability insurance benefits. Moreover, ‘disability,’ for purposes of Social Security, is defined, with certain exceptions not relevant here, as the ‘inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.’ Since SSDI benefits are thus available only to people who cannot perform even sedentary work, the SSDI program is not an accidental disability pension similar to the pensions available under New York retirement law.”

The Court also concluded that there was “a widespread recognition, by both the Legislative and Executive branches of New York government, that a disabled [individual] might, by virtue of receiving SSDI benefits, collect more than the wages he had been earning while healthy, and that the bill that came to be enacted provided no basis upon which a municipality could reduce the wages it was paying a disabled [individual] by the amount of the SSDI benefits. The only reasonable conclusion that can be drawn from the Legislature’s failure to do so is that the Legislature intended no such reduction to be permissible.”

McCaffrey v. Town of East Fishkill, 2007 WL 926475 (A.D. 2007).

This article appears in the June 2007 issue