Smith v. Board of Trustees of the Teachers' & State Employees' Retirement System

EAGLES, Judge.

I.

Petitioner 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’s Social Security disability benefits and the superior court erred in affirming the final agency decision.

II.

Petitioner also argues that under G.S. 135-106(b), widow’s insurance benefits are not “primary Social Security disability benefits.” A *634 woman may be entitled to widow’s 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. § 402 (e); Cook v. Heckler, 783 F.2d 1168, 1169 (4th Cir. 1986). Here, petitioner received widow’s insurance benefits because she was between fifty and sixty years of age and she was disabled.

A review of the pertinent portions of the Social Security Act (hereinafter Act) reveals that the Act differentiates between disability insurance benefits and widow’s insurance benefits. The two benefits are authorized by separate statutory sections. The provision for widow’s insurance benefits is found in section 402 of the Act, which is entitled “[o]ld-age and survivors insurance benefit payments.” 42 U.S.C. § 402 . The provision for disability insurance benefits is in a different section, 42 U.S.C. section 423 , entitled “[disability insurance benefit payments.” 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’s insurance benefits are paid out of the Federal Old-Age and Survivors Insurance Trust Fund. 42 U.S.C. § 401 (h). Disability insurance benefits are paid out of the Federal Disability Insurance Trust Fund. 42 U.S.C. § 401 (h).

After 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’s insurance benefits, widow’s insurance benefits are separate and different from Social Security disability benefits. Accordingly, we conclude that the reference to “Social Security disability benefits” in G.S. 135-106(b) does not include widow’s insurance benefits. We hold that the superior court erred in concluding that petitioner’s long-term disability benefits payable by the State Retirement System were subject to a reduction in the amount of petitioner’s widow’s insurance benefits.

We reverse and remand to the Superior Court for entry of a decision consistent with this opinion.

Reversed and remanded.

Judges LEWIS and McGEE concur.