Michigan Supreme Court; Docket No. 67794; Published
Opinion by Justice Levin; 4-3
Official Michigan Reporter Citation: 418 Mich 610; Link to Opinion 
STATUTORY INDEXING:
Standards for Deductibility of State and Federal Governmental Benefits [§3109(1)]
Social Security Disability Benefits [§3109(1)]
TOPICAL INDEXING:
Social Security Disability and Death Benefits
CASE SUMMRAY:
In this 4-3 Opinion by Justice Levin, the Supreme Court reversed the Court of Appeals in item number 426. The majority held that social security disability benefits received by the dependents of an injured wage earner because of the wage earner's disability are required to be subtracted from no-fault work-loss benefits otherwise payable for the injury, including those received by the wage earner himself.
Plaintiff Francis Thompson, a husband and father of two minor children, was disabled in an auto accident He was thus entitled to recover no-fault wage-loss benefits pursuant to §3107 of the Act. Because of his disabling injuries, he also received social security disability benefits from the federal government as did his wife and two dependent children. The Thompson family lived together as a family unit Mr. Thompson did not challenge DAIIE's subtraction of his own social security benefits against the no-fault work-loss benefits. However, he contended that DAIIE could not reduce his no-fault work-loss benefits by the amount of the social security disability benefits paid to his wife and his two minor children. The circuit court granted summary judgment in favor of Thompson and the Court of Appeals affirmed. The Supreme Court reversed.
In holding that all of the social security benefits received by the Thompson family unit could be subtracted and setoff against Mr. Thompson's work-loss benefits, the majority opinion reasoned that the social security disability payments received by the wife and minor children were merely a substitute or replacement for the husband/father's income that would have inured to their specific benefit had he not been injured. No-fault wage-loss benefits are merely intended to replace that loss. Therefore, any government benefit received by any of the family members must be offset against these no-fault benefits which, in essence, are a family income benefit To this effect, the Court stated:
"Rather than make all the [social security] disability payments to the worker and have family members continue to receive all their support from the worker, the Congress has chosen instead to pay a portion of the total benefits in respect to the disability to the disabled worker and the remainder directly to the spouse and child. Although the Congress has chosen
"to change the name on the check, disability payments to dependents replace the income that would have inured to the spouse and child had the worker to whom they look for support not been injured."
The majority opinion contains an important passage in footnote number 8 regarding the deductibility of social security benefits in broken home situations. In this footnote, the Court clearly indicates that the deductibility of family unit social secunty benefits approved in the majority opinion would not necessarily be permitted in broken home/remarriage situations. To this effect, the Court stated:
"To the extent that a divorced spouse or a child does not receive alimony or child support payments, or to the extent that disability payments to dependents exceed alimony or child support payments, the disability payments might not replace loss of income from work the injured person would have performed but for the injury. Such payments might not, to that extent, be required by §3109(1) to be subtracted from no-fault work-loss benefits."
Justice Cavanagh dissented, joined by Chief Justice Williams and Justice Brickley. Justice Cavanagh wrote that social security disability benefits paid to a worker's family serve an entirely different purpose than no-fauit work-loss benefits paid to the worker. No-fault work-loss benefits replace an injured worker's lost wages without regard to the number of dependents the worker may have. The social security disability benefits are not designed to compensate the wage earner alone but are intended to provide at least subsistence payments to wage earners and their dependents. Under the No-Fault Act the ultimate beneficiary of work-loss benefits is the injured worker whereas social security disability benefits are paid separately to the worker and to his spouse and children. Although the net effect of both types of benefits generally is to maintain the entire family's standard of living, the purpose and effect of each is not synonymous. Only the purpose is to be considered in determining what benefits are duplicative. Justice Cavanagh also stated in his dissent that in situations involving death, he would have no difficulty in concluding that social security survivors loss benefits would be setoff against no-fault survivors loss benefits because both types of benefits are intended to compensate dependents for the support which would have been received had the decedent lived.
