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benefits, and this reduction is the workers’ compensation offset.
20 C.F.R. sec. 404.408(a) (2001). The workers' compensation
offset to Social Security benefits generally is considered as
included in the amount of Social Security benefits received.
Sec. 86(d)(3); Mikalonis v. Commissioner, T.C. Memo. 2000-281.
The relevant House report states in part:
For example, if an individual were entitled to $10,000 of
social security disability benefits but received only $6,000
because of the receipt of $4,000 of workmen’s compensation
benefits, then, for purposes of the provisions taxing social
security benefits, the individual will be considered to have
received $10,000 of social security benefits. [H. Rept. 98-
25, at 26 (1983)].
However, what is vital in this case is that Social Security
benefits are not to be reduced by workers' compensation benefits
if the workers' compensation plan provides for the reduction of
the workers’ compensation benefits by Social Security benefits.
20 C.F.R. sec. 404.408(b)(2) (2001). As respondent puts it, this
prevents a double offset.
Under Minnesota law, after a total of $25,000 of workers'
compensation benefits has been paid, the amount of such benefits
to be received thereafter “shall be reduced” by the amount of
Social Security benefits received on account of the same injury.
Minn. Stat. Ann., sec. 176.101 subdiv. 4 (2001). Thus, under 20
C.F.R. sec. 404.408(b)(2) (2001), petitioner's Social Security
benefits should not have been reduced by a workers' compensation
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