Lump-Sum Workers Compensation Claims: A Guide To Understanding Your Benefits.

February 17, 2022

A worker who has suffered an injury at work can receive two types of Workers’ Compensation. The first is a lump sum, and the second is periodic payments. Each has its respective pros and cons, and when choosing between them, you must consider your financial situation and the specific details of your case to select the option that will provide you with the most money.

Lump-sum claims are also known as “total permanent disability” (TPD) or “total and permanent disability” (TPD) claims. They are designed to provide a lump-sum payment for the total cost of workers compensation cover if you are deemed totally and permanently disabled.

The lump sum is calculated based on your pre-injury earnings. The maximum amount payable is $415,000 (2017).

Note: Lump sum settlements are not the same as lump-sum buyouts, which are agreements in which the injured worker gives up the right to additional medical care and lost wages in exchange for a more significant initial settlement amount.

Lump-Sums Payments

A lump-sum payment is an option that allows you to receive compensation for your permanent disability at a single, upfront cost rather than waiting for the end of the claim process. Lump-sum charges are available in the United States if:

You have suffered a permanent impairment or disability;
Your injury has left you unable to continue working; and
You have reached maximum medical recovery and are qualified for a lump sum payment under USA’s lump sum provisions.

They can be used as a form of rehabilitation or awarded to a claimant who has sustained permanent injuries while working. Lump sums are based on the severity of the damage, and they are not subject to income taxes. A lump sum is available in most states and at the discretion of the insurance company or employer.

The trend in the past of paying lump sums to workers’ compensation claimants has changed. Now, companies are paying lump sums to those who have suffered severe injuries to help them return to gainful employment.

Most workers are not even aware that they have options in a lump sum settlement and may negotiate a higher price by presenting their employer with a plan for the future use of the money.

Once the parties agree to settle a claim for a lump sum, the injured worker will receive instructions on how to claim their funds. The Department of Industrial Accidents (DIA) handles all lump sum settlements and can answer any questions you might have.

However, these payouts are not awarded to everyone, and there are specific criteria required before a lump sum payment is approved.

Who is eligible for Lump-Sum Workers’ Compensation Payment?

Just because you’ve been injured at work doesn’t mean you’ll automatically eligible for lump sum payment. So, who is eligible for lump-sum payments for workers’ comp? In most cases, the answer is someone who has been injured on the job and is receiving ongoing treatment. However, some other situations may qualify you for a lump sum payment.

To be eligible for a lump-sum payment:

You must have been injured while working.
You must also have been treated by a licensed workers’ compensation doctor and have had a reasonable number of visits to your doctor or rehabilitator.

Every state has its own workers’ compensation laws and regulations. The eligibility criteria for lump sums vary from state to state. In most states, if you become permanently disabled after a work-related injury, you will be eligible for up to three years worth of payments.

When determining the amount of a lump sum award, the state is required to consider your ability to work. If you can work in another job, you will receive a large payment, but if you are permanently disabled, you may receive a smaller amount. A Workers’ Comp Lawyer can help you determine how much money you may be entitled to receive by filing a claim with the workers’ compensation board.

If you plan to file a Workers’ Compensation Claim, check out our Workers’ Compensation blog.

Contact the experienced and helpful team of attorneys at Pistiolas Workers’ Compensation Lawyers today if you’re currently looking into workers compensation claims.