## Facts

- Gloria Harden injured her back while working and claimed the injury left her disabled.
- Harden applied for both Social Security disability benefits and state workers’ compensation benefits based on the same back injury.
- The Social Security Administration denied Harden’s disability claim through the administrative process, but after judicial review and a remand, Harden was awarded Social Security disability benefits.
- While Harden’s Social Security claim was pending, she received workers’ compensation benefits of $189 per week.
- Harden also received a $20,000 workers’ compensation lump-sum payment representing benefits for weeks for which she was entitled to workers’ compensation but had not been paid.
- An administrative-law judge applied the federal workers’ compensation offset to Harden’s Social Security disability benefits.
- To convert the $20,000 lump sum into a periodic amount for offset purposes, the ALJ divided the lump sum by $189, yielding an offset period of 105 weeks.
- The ALJ excluded attorney’s fees from the lump-sum amount, subtracted those fees, and prorated the fee exclusion across the same 105-week period, resulting in an offset amount of $141.68 per week.
- The ALJ’s decision became the final decision of the Secretary of Health and Human Services.
- Harden sought judicial review of the offset calculation; the district court affirmed, and Harden appealed.

## Issues

1. Whether the Secretary properly calculated the Social Security workers’ compensation offset by prorating Harden’s workers’ compensation lump-sum payment over 105 weeks using her prior $189 weekly workers’ compensation rate (and prorating attorney’s fees over the same period), rather than spreading the lump sum over a longer period based on a different measure of potential state-law entitlement.

## Decision

- The court affirmed the district court’s judgment upholding the Secretary’s final decision.
- The court upheld the use of Harden’s prior weekly workers’ compensation rate as a reasonable basis to convert the lump-sum payment into a periodic equivalent for purposes of the federal offset.
- The court upheld the ALJ’s treatment of attorney’s fees by excluding them from the lump-sum amount and allocating that exclusion across the same proration period used for the lump sum.

## Legal Principles

- Under 42 U.S.C. § 424a, Social Security disability benefits are reduced when a beneficiary also receives workers’ compensation, to keep combined benefits within the statutory limit tied to the claimant’s pre-disability earnings.
- When workers’ compensation is paid in a lump sum, the agency may convert the lump sum to a weekly (or other periodic) equivalent for offset purposes using a reasonable method that reflects the periodic benefits the lump sum replaces.
- The agency may account for attorney’s fees by excluding them from the amount treated as workers’ compensation for offset purposes and allocating that exclusion across the same period used to prorate the lump sum.
- Courts generally uphold the agency’s offset calculation where the chosen proration approach is consistent with the statute’s function and is not arbitrary.

## Conclusion

The court upheld the Secretary’s offset calculation, agreeing that it was reasonable to convert Harden’s $20,000 workers’ compensation lump-sum payment into a 105-week periodic equivalent by using her prior $189 weekly rate and to handle attorney’s fees by excluding them from the offsetable amount and prorating that exclusion over the same 105 weeks.


Harden v. U.S. Department of Health and Human Services, 979 F.2d 1082 (1992)