Discontinuation of permanent disability OK based on retirement presumption

In Minnesota, the retirement presumption, which states that permanent total disability ceases to exist at age 67 because a worker is presumed to be retired, applies unless the worker rebuts the presumption or proves a knowing and intentional waiver by the employer.

Case name: Frandsen v. Ford Motor Co., No. A11-0126 (Minn. 08/10/11).

Ruling: The Minnesota Supreme Court held that a company was entitled to discontinue paying permanent total disability benefits to an older worker because it did not waive the retirement presumption in its settlement with the worker.

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What it means: In Minnesota, the retirement presumption, which states that permanent total disability ceases to exist at age 67 because a worker is presumed to be retired, applies unless the worker rebuts the presumption or proves a knowing and intentional waiver by the employer.

Summary: A worker for a motor company was injured in the course and scope of his employment. The company paid medical, rehabilitation, and temporary total disability benefits. The parties settled his workers' compensation claims and agreed he was permanently and totally disabled. The parties agreed that the company overpaid the worker benefits because the benefits should have been offset by the amount he received in Social Security disability insurance benefits. The parties agreed to reduce the PTD payments to offset the company's overpayment. The settlement did not mention the retirement presumption, which states that permanent total disability ceases to exist at age 67 because a worker is presumed to have retired from the labor market. After the worker turned 67, the company sought to discontinue paying his PTD benefits. The Minnesota Supreme Court held that the company was entitled to discontinue paying PTD benefits because the retirement presumption was not waived in the settlement.

The court concluded that a waiver could not be implied by an inaction of the parties. A worker must show the employer's intent to waive the presumption. Here, the company did not expressly waive the presumption. The court found no indication that the company intended to waive it. The settlement did not contain language showing a length of time the company intended to pay PTD benefits to the worker. The worker did not point to actions by the company or circumstances surrounding the settlement showing an intention to waive the presumption.

Read more at the WorkersComp Forum homepage.

October 10, 2011

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