{
  "id": 11919111,
  "name": "SHIRLEY M. SMITH, Petitioner v. BOARD OF TRUSTEES OF THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM",
  "name_abbreviation": "Smith v. Board of Trustees of the Teachers' & State Employees' Retirement System",
  "decision_date": "1996-06-04",
  "docket_number": "No. COA95-786",
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  "last_updated": "2023-07-14T15:39:52.508825+00:00",
  "provenance": {
    "date_added": "2019-08-29",
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    "judges": [
      "Judges LEWIS and McGEE concur."
    ],
    "parties": [
      "SHIRLEY M. SMITH, Petitioner v. BOARD OF TRUSTEES OF THE TEACHERS\u2019 AND STATE EMPLOYEES\u2019 RETIREMENT SYSTEM"
    ],
    "opinions": [
      {
        "text": "EAGLES, Judge.\nI.\nPetitioner first argues that under G.S. 135-106(b), the amount of offset for disability benefits received from the Social Security Administration is the net amount after deduction of attorneys fees and costs associated with obtaining the disability benefits. Our recent decision in Willoughby v. Board of Trustees, No. COA94-1066 (N.C. Ct. App. Feb. 6, 1996) is dispositive of this issue. In Willoughby, we held that the amount of offset for disability benefits received from the Social Security Administration is the net amount after deduction of attorneys fees. Accordingly, we hold that the AU and the final agency erred in determining that respondent was entitled to an offset for the gross amount of petitioner\u2019s Social Security disability benefits and the superior court erred in affirming the final agency decision.\nII.\nPetitioner also argues that under G.S. 135-106(b), widow\u2019s insurance benefits are not \u201cprimary Social Security disability benefits.\u201d A woman may be entitled to widow\u2019s insurance benefits on the Social Security account of her deceased husband if: (1) she is sixty years of age or older or (2) she is at least fifty years of age, but less than sixty years of age, and is disabled. 42 U.S.C. \u00a7 402(e); Cook v. Heckler, 783 F.2d 1168, 1169 (4th Cir. 1986). Here, petitioner received widow\u2019s insurance benefits because she was between fifty and sixty years of age and she was disabled.\nA review of the pertinent portions of the Social Security Act (hereinafter Act) reveals that the Act differentiates between disability insurance benefits and widow\u2019s insurance benefits. The two benefits are authorized by separate statutory sections. The provision for widow\u2019s insurance benefits is found in section 402 of the Act, which is entitled \u201c[o]ld-age and survivors insurance benefit payments.\u201d 42 U.S.C. \u00a7 402. The provision for disability insurance benefits is in a different section, 42 U.S.C. section 423, entitled \u201c[disability insurance benefit payments.\u201d The two benefits are paid from separate funds. Pursuant to section 401 of the Act, there are two trust funds from which Social Security benefits are paid. Widow\u2019s insurance benefits are paid out of the Federal Old-Age and Survivors Insurance Trust Fund. 42 U.S.C. \u00a7 401(h). Disability insurance benefits are paid out of the Federal Disability Insurance Trust Fund. 42 U.S.C. \u00a7 401(h).\nAfter reviewing the applicable provisions of the Act, we agree with petitioner that, although her disability was part of the criteria under which she was eligible for widow\u2019s insurance benefits, widow\u2019s insurance benefits are separate and different from Social Security disability benefits. Accordingly, we conclude that the reference to \u201cSocial Security disability benefits\u201d in G.S. 135-106(b) does not include widow\u2019s insurance benefits. We hold that the superior court erred in concluding that petitioner\u2019s long-term disability benefits payable by the State Retirement System were subject to a reduction in the amount of petitioner\u2019s widow\u2019s insurance benefits.\nWe reverse and remand to the Superior Court for entry of a decision consistent with this opinion.\nReversed and remanded.\nJudges LEWIS and McGEE concur.",
        "type": "majority",
        "author": "EAGLES, Judge."
      }
    ],
    "attorneys": [
      "Hall & Joneth, P.G., by Charles T. Hall, for petitioner-appellant.",
      "Attorney General Michael F. Easley, by Special Deputy Attorney General Alexander McC. Peters, for respondent-appellee."
    ],
    "corrections": "",
    "head_matter": "SHIRLEY M. SMITH, Petitioner v. BOARD OF TRUSTEES OF THE TEACHERS\u2019 AND STATE EMPLOYEES\u2019 RETIREMENT SYSTEM\nNo. COA95-786\n(Filed 4 June 1996)\n1. Public Officers and Employees \u00a7 59 (NCI4th)\u2014 State retirement system disability benefits \u2014 offset for Social Security \u2014 net amount after attorney fees\nA determination that respondent State retirement system was entitled to an offset in disability benefits for the gross amount of petitioner\u2019s Social Security disability benefits rather than the net amount after attorney fees was erroneous. Willoughby v. Board of Trustees, 121 N.C. App. 444 is dispositive.\nAm Jur 2d, Civil Service \u00a7 48.\n2. Public Officers and Employees \u00a7 59 (NCI4th)\u2014 State retirement system disability benefits \u2014 no reduction by Social Security widow\u2019s benefits\nThe superior court erred in concluding that petitioner\u2019s long-term disability benefits payable by the State retirement system were subject to a reduction in the amount of petitioner\u2019s widow\u2019s insurance benefits. Although petitioner\u2019s disability was part of the criteria under which she was eligible for widow\u2019s insurance benefits, widow\u2019s insurance benefits are separate and different from Social Security disability benefits and the reference to \u201cSocial Security disability benefits\u201d in N.C.G.S. \u00a7 135-106(b) does not include widow\u2019s insurance benefits.\nAm Jur 2d, Civil Service \u00a7 48.\nAppeal by petitioner from order entered 5 May 1995 by Judge Robert L. Farmer in Wake County Superior Court. Heard in the Court of Appeals 16 April 1996.\nShirley M. Smith (hereinafter petitioner) is a former employee of the Cumberland County School System who retired due to disabling illness. As a result of petitioner\u2019s illness, she began receiving long-term disability benefits from the State Retirement System pursuant to G.S. 135-106. Petitioner filed claims with the Social Security System for disability insurance benefits pursuant to 42 U.S.C. section 423 and for widow\u2019s insurance benefits pursuant to 42 U.S.C. section 402(e). After the Social Security Administration denied petitioner\u2019s pro se claims twice, petitioner retained counsel and requested an administrative hearing regarding her claims. Petitioner and her counsel signed a contingent fee agreement whereby petitioner\u2019s counsel would receive twenty-five percent of the back benefits paid to petitioner if her claims were approved, but counsel would receive no fee if petitioner\u2019s claims were denied. After the hearing, the Social Security Administration approved both of petitioner\u2019s claims. Pursuant to 42 U.S.C. section 406, the Social Security Administration withheld $2352 (twenty-five percent) of petitioner\u2019s back benefits for attorneys fees. Petitioner\u2019s counsel petitioned the Social Security Administration for payment of the agreed upon fees and after counsel\u2019s petition was approved, the Social Security Administration paid $2352 directly to petitioner\u2019s counsel.\nG.S. 135-106(b) provides that long-term disability benefits are subject to reduction in the amount of the recipient\u2019s \u201cprimary Social Security disability benefits.\u201d The Retirement System determined that petitioner was required to repay an amount equal to the gross amount of Social Security benefits to which she was entitled, including the twenty-five percent that the Social Security Administration paid directly to her attorney for attorneys fees.\nPetitioner petitioned for a contested case hearing with the Office of Administrative Hearings, arguing that the amount of offset should be the net amount of Social Security disability benefits (the gross amount of benefits less the twenty-five percent attorneys fee) and that the Retirement System should not require an offset for petitioner\u2019s widow\u2019s insurance benefits. After a hearing, the Administrative Law Judge (hereinafter AU) issued a recommended decision, concluding that long-term disability benefits paid by the Retirement System could be reduced by the gross amount of Social Security disability benefits, but that long-term disability benefits paid by the Retirement System could not be reduced by the amount of petitioner\u2019s widow\u2019s insurance benefits. The Board of Trustees of the Teachers\u2019 and State Employees\u2019 Retirement System (hereinafter respondent) issued its final agency decision, adopting the AU\u2019s recommended decision in part but declining to accept the AU\u2019s conclusion that long-term disability benefits could not be reduced by widow\u2019s insurance benefits. Respondent concluded that long-term disability benefits must be reduced by both Social Security disability benefits and widow\u2019s insurance benefits. Upon petition for review, the superior court affirmed the final agency decision on 5 May 1995.\nPetitioner appeals.\nHall & Joneth, P.G., by Charles T. Hall, for petitioner-appellant.\nAttorney General Michael F. Easley, by Special Deputy Attorney General Alexander McC. Peters, for respondent-appellee."
  },
  "file_name": "0631-01",
  "first_page_order": 667,
  "last_page_order": 670
}