Decided: January 23, 2017

Topic: Retirement Presumption

In this recent Appellate Division decision, the retirement presumption in §223 of the Workers’ Compensation Act was addressed. For those unfamiliar with this particular section of the Act, the retirement presumption stands for the premise that upon retirement from active employment, when receipt of retirement benefits begins, it is presumed a loss of earnings does not exist. The employee may rebut this presumption with a preponderance of evidence for total incapacity, but should they fail, entitlement to incapacity benefits will be denied.

The employee here, Mr. Paradis, was not working at the time of his retirement due to the effects of a work injury. While he had maintained a partial work capacity, his employer was unable to accommodate him in a position and it appears he had not established employment elsewhere. The ALJ determined Mr. Paradis terminated “active employment” for purposes of applying the retirement presumption in these circumstances. However, the panel on appeal disagreed.

A bright line test continues to control for the retirement presumption – if you are working in any capacity, in other words, actively employed when you retire, the presumption applies. However, even if you have previously expressed an intention to retire and you then go out of work just a day prior to that retirement date, you are not actively employed and not subject to the retirement presumption. Similarly here, although Mr. Paradis maintained a capacity to work, he was not in fact working prior to his retirement and so the presumption does not apply.

I have a hunch that retirement presumption issues will be an ongoing theme of this year’s appellate decisions, so look forward to more elaboration from the Board on these cases!

For full text of the decision, visit: http://www.maine.gov/wcb/Departments/appellate/2017decisions/17-4_Paradis_v._Twin_Rivers_Paper_Company_1-23-17.pdf