Dale J. and Phillis L. De Both - Page 5




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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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