                                 CODE OF VIRGINIA

ADJUSTMENTS TO DISABILITY BENEFITS (§ 51.1-1114)

A. Disability benefit payments shall be offset by an amount equal to any sums
payable to a participating employee from the following sources:

   1. During the first 12 months the employee receives disability benefits, an
   amount equal to the employee&#8217;s wages and salary from any employment
   times the creditable compensation replacement percentage;

   2. After the first 12 months the employee receives disability benefits, an
   amount equal to 70 percent of the employee&#8217;s wages and salary from any
   employment;

   3. Disability payments from the Social Security Administration, local
   government disability benefits, federal or civil service disability benefits,
   or other similar governmental disability program benefits received by the
   employee or his family as a result of the qualifying disability;

   4. Benefits received from any other group insurance contract provided by the
   Commonwealth for the purpose of providing income replacement; and

   5. Benefits paid under any compulsory benefits law.
   				Notwithstanding the foregoing, disability benefit payments shall not be
   offset by military disability benefits payable to a participating employee.

B. If the plan administrator deems a participating employee to be eligible for
benefits from any of the sources listed in subdivisions A 3, A 4, and A 5, the
plan administrator may direct the participating employee to apply for those
benefits and to pursue whatever additional steps are necessary to obtain the
benefits. If a participating employee fails or refuses to pursue the available
benefits as directed by the plan administrator, disability benefit payments may
be offset by amounts from any of the sources listed in subdivisions A 3, A 4,
and A 5 for which a participating employee is deemed eligible by the plan
administrator as if the employee received such amounts. However, if the employee
has applied for such benefits, and has reapplied and appealed denials of the
claim as requested by the administrator of the plan, and the claim is not
approved, the employee&#8217;s disability payments shall not be reduced thereby.

C. If a participating employee&#8217;s disability benefit payments are reduced
as the result of payments from sources listed in subdivisions A 3, A 4, and A 5
or pursuant to subsection B, the employee&#8217;s disability benefits shall not
thereafter be further reduced on account of cost-of-living increases in payments
from such sources.

D. Participating employees shall be required to repay, with interest to the
Board or their employer, any overpayments of disability benefits on account of
the failure of the employee to provide the Board or its designee with
information necessary to make any of the reductions required to be made under
this article.

E. Any payment to a participating employee that is later determined by the Board
or by the employer to have been procured on the basis of any false statement or
falsification of any record knowingly made by or on behalf of the member, or the
employee&#8217;s failure to make any required report of change in disability
status, may be recovered from the employee by the Board, with interest, either
by way of a credit against future payments due the employee, his survivor and
beneficiaries or by an action at law against the employee.

HISTORY: 1998, c. 774; 1999, c. 144; 2000, c. 889; 2003, c. 5; 2004, c. 99;
2006, cc. 778, 841; 2012, c. 417.