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CHAPTER 3-203 - SECTION 10(H)

1. Purpose and Scope. This Chapter provides the procedures for determining the amount of initial and subsequent compensation payable in those cases subject to section 10(h) of the Act.

2. History. When Congress enacted Pub. L. No. 92-576 on October 27, 1972, one of the primary purposes was to raise the benefit levels for those individuals receiving permanent total disability and death benefits. At that time, the maximum weekly compensation payable in these cases was $70.00 per week. In order to limit the impact of these increased benefits, it was established that fifty percent of the increased benefits would be funded annually by Congress and the remaining fifty percent would be obtained from an assessment of insurance carrier and self-insured employers. Initially these increased benefits were paid directly by the insurance carrier or self insured employer. Every six months, a claim for these additional payments was made to the NO. Reimbursement was directed to the ECs after verification of payment was made. Effective September 10, 1981, the direct payment of these benefits became the sole responsibility of the NO.

3. Case Law. The language in section 10(h) has led to considerable controversy and litigation.

a. The BRB, in Silberstein v. Service Printing Company, 2 BRBS 143 (1975), considered whether section 10(h)(1) was applicable to a person who was injured before but permanently and totally disabled after the 1972 amendments. The Board noted that it was:

The Board is of the opinion that the intent and purpose of all of section 10(h) is to upgrade benefits for permanent total disability or death from injuries occurring prior to the effective date of the amendments of the Act.

In addition, in this decision the Board held that the claimant is entitled to all cost of living increases between November 26, 1972 and the date the permanent total disability commences. Thus, if the claimant was injured in 1971 with an average weekly wage of $105.00 per week and a permanent total disability date of October 15, 1975 the rate would be $107.00 per week computed as follows:

(1) The ECs liability would be limited to $70.00 per week.

(2) The balance of the payment would be made by the Special Fund. In order to determine the Special Fund's liability and the rate of compensation claimant would receive on the effective PTD date, October 15, 1975, the computations would be as follows: The Special Fund liability would be calculated from November 26, 1972. The claimant would be entitled to increases of $17.87 on 11/26/72 which is 66 2/3% of the National Average Weekly Wage (NAWW) established for that date less the ECs maximum liability (2/3 x $131.80 = $87.87 - $70.00= $17.87). On 10/1/73, a 6.49% increase in the NAWW results in a $24.00 increase to the claimant ($87.87 + 6.49% = $94.00 (rounded) - $70.00 = $24.00). On 10/1/74 the claimant would begin receiving $30.00 more ($94.00 + 6.26% = $100.00 (rounded) - $70.00 = $30.00). On 10/1/75 the claimant would begin receiving $37.00 per week from the Special Fund. The claimant's total payment would be $107.00 per week and his/her future annual increase would be based upon this amount (i.e. on 10/1/76: $107 + 7.59% = $115.00 (rounded), $70.00 paid by the EC and $45.00 paid by the Special Fund).

b. In Luke v. Petro-Weld, 12 BRBS 338 (5th Cir. 1980), the Court held that section 10(h) did not apply to injuries occurring after the date of enactment of the 1972 amendments, October 27, 1972. Section 10(h) would only apply to injuries occurring prior to the enactment date.

c. While most section 10(h) issues have previously been resolved by litigation, one issue still remains under consideration. In cases where the injury takes place prior to the enactment of the 1972 amendments but the death occurs after the 1972 amendments, the determination of the ECs liability is still in dispute. The Sixth Circuit, in Director, OWCP v. Detroit Harbor Terminals, Inc., 850 F.2d 283, 21 BRBS 85(CRT)(6th Cir. 1988), held that the EC’s liability was limited by the maximum in effect prior to the 1972 amendments. However, the First Circuit, in Director, OWCP v. Bath Iron Works (Lebel), 885 F.2d 983,22 BRBS 131 (CRT)(1^st Cir. 1989), cert. denied, 494 U.S. 1091 (1990), reversed the Board's determination that Section 10(h) applies where a post-1972 amendment death follows a pre-1972 amendment injury. The court held that because death benefits for a post-1972 death are calculated at the more generous post-1972 rates, it is unnecessary for the "gap-closing" provision of Section 10(h)(l) to apply. In view of these decisions, the Director has taken the position that the death is a new cause of action and therefore the ECs liability for basic compensation is determined in accordance with that date, with all future adjustments payable by the Special Fund under section 10(h). Given the conflict in circuit court decisions, cases of this nature should be referred directly to the NO for a determination as to the amounts payable by the EC and the Special Fund.

4. National Office Issuances. As time passes, the number of section 10(h) cases will diminish. However, all DDs and CEs should be aware of NO issuances on this subject made since the 1972 amendments. A copy of any of the following issuances can be obtained from the National Office.

a. OWCP Bulletin No. 10-73, 3/30/73, Adjustment of Compensation for Total Permanent Disability or Death Prior to LS/HW Amendments of 1972.

b. LHWCA Bulletin No. 2-75, 1/31/75, Procedures for Providing sections 10(h)(1) and 10(f) Adjustments for Eligible Cases Involving Multiple Payees and Certain Cases Where the Widow Has Remarried.

c. All Deputy Commissioners (LHWCA), 2/8/78, Adjustment of Permanent Total Disability and Death Benefits in Cases When the Date of Injury Occurred Prior to January 1, 1947.

d. Circular No. 80-14, 8/21/80, BRB Decision on Deficiency Compensation and section 10(h)(2), Waganer v. Alabama Dry Dock and Shipbuilding Co.