Michigan Supreme Court; Docket No. 68003; Published
Judges Ryan, Williams, Cavanagh, and Boyle; 4-3
Official Michigan Reporter Citation: 418 Mich 565; Link to Opinion 
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Social Security Retirement Benefits [§3109(1)]
TOPICAL INDEXING:
Legislative Purpose and Intent
CASE SUMMARY:
In this 4-3 Opinion by Justice Ryan, the Supreme Court reversed the Court of Appeals in item number 605. The Court held that the social security old-age retirement benefits received by plaintiff could not be offset against no-fault wage-loss benefits under §3109(1) of the No-Fault Act.
The relevant facts are as follows. Plaintiff was disabled in an automobile accident shortly before his mandatory retirement at the age of 65 years. Had plaintiff not been injured in the automobile accident he would have worked for a new employer after his retirement Upon commencing his new employment, plaintiff’s old-age social security retirement benefits would have been reducedby an amount based upon the wages he was earning in his new job. Therefore, had the auto accident not intervened, plaintiff would have been earning wages from the new employment but would have been receiving a lesser amount in social security old-age retirement benefits. Because of his disabling auto accident injuries, plaintiff became totally unemployed after his mandatory retirement and thus began receiving the full amount of his social security benefits. DAIIE acknowledged its responsibility to pay no-fault work-loss benefits as a result of the loss of income plaintiff suffered as a result of not being able to commence his new employment, but argued that the amount of the reduction in social security old-age benefits that plaintiff would have suffered had he been able to work should be deducted from the no-fault work-loss benefits payable to plaintiff. The trial court granted defendant's motion for summary judgment and the Court of Appeals affirmed. The Supreme Court reversed.
The majority held that none of the social security old-age retirement benefits received by plaintiff could be offset against his work-loss benefits even though plaintiff was technically "financially better off" after the accident than he would have been had he not been injured in the accident In his majority opinion, Justice Ryan spent considerable time articulating the appropriate test to be applied in determining whether or not a governmental benefit may be setoff under §3109(1). Justice Ryan wrote that the correct test requires a two part analysis which holds that a government benefit may only be deducted against no-fault benefits if the government benefits:
1. Serves the same purpose as the no-fault benefits, and
2. Is provided or required to be provided as a result of the same accident.
With respect to the first prong of this test, the majority opinion indicated that it is not the generalized purpose of the governmental benefit, but rather the specific purpose of the benefit which should be analyzed in terms of whether or not it serves the same purpose as the no-fault benefit The majority held that no-fault work-loss benefits are a substitute for wages which a person actually would have earned but for an accident On the other hand, the occurrence of an accident is totally irrelevant with respect to the availability of social security old age benefits.
With respect to the second prong of the test, the majority stated that the two types of benefits received must have "substantially equivalent qualifications" and that they "must be contingent upon the occurrence of the same automobile accident" Apparently, commonality in the triggering events is not sufficient If the automobile accident alone is not sufficient to trigger the governmental benefit, then the government benefit is not paid for the same purpose. The Court noted, "the challenged differential benefit is not provided or required to be provided because the plaintiff is disabled; it is only provided or required to be provided to persons who have reached 65 years of age ... even assuming that, but for the accident, the plaintiff would not have received the disputed amount, the accident is not the triggering event since the accident alone will not precipitate payment of the disputed benefit"
Justice Levin dissented joined by Justices Kavanaugh and Brickley. The dissenters felt that social security retirement benefits which would not have been paid to a person injured in an automobile accident except for the resultant loss of income from a post-retirement job are duplicative of no-fault work-loss benefits and should be subtracted from no-fault work-loss benefits.
