Lump sum and segmented payouts for workers' compensation

The Workers' Compensation Research Institute (WCRI) addressed the on-going debate as to the value of lump-sum settlements of workers' compensation claims to encourage people to return to work after work-related accidents. As you might imagine, proponents and detractors of lump-sum payouts typically cite statistics that appear to support their position.

In an attempt to settle the debate for good, the WCRI reported on the issue this past July when they examined more than 2000 workers who received workers' compensation lump-sum settlements after injuries from as far back as 2004. The group the WCRI surveyed spanned states throughout the Northeast, as well as Michigan, Indiana, Illinois, and Ohio. The WCRI believes that employers and insurance companies throughout the country can learn from these findings and it tracked survey participants' employment statuses through 2010. 

Proponents of lump-sum settlements historically believe that large, one-time payouts bring closure to victims and encourages them to return to work sooner than they might have if their payments were segmented. Detractors have maintained that lump-sum awards delay a return to work because victims no longer worry about money for the short term, or long term, depending on the settlement.

This WCRI believes that those in favor of lump-sum payouts are in the right, citing that, statistically, more injured people receiving lump-sum payouts came back to work than those who did not. The one exception was older workers and workers already nearing retirement who often did not show any desire to return to work after their injury.

The survey indicated that lump-sum settlements seem to encourage employees to return to work more quickly after they have recovered from their personal injuries. Those who dislike their jobs are unaffected by the results, and those employees who consider working as an important life responsibility often respond and return faster when given lump-sum payouts.

Policymakers should take note of survey responses to help formulate future procedures for workers' compensation claims payments. If you have been injured on the job, you may have a workers' compensation claim against your employer. Call the Pittsburgh workers' compensation attorneys at Dugan & Associates today at 412-922-0800 or 800-639-4314 for a free consultation.

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