Lump Sum Settlements

A lump sum settlement of a workers’ compensation claim may often be in the best interest of the injured worker. A lump sum settlement must be approved by a judge as being in the injured worker’s best interest. Lump sum settlements are a final termination of the rights to receive further benefits from the insurer on a weekly basis for a particular injury. In cases where liability has been established, a lump sum will not close out rights to future medical treatment. There is no guarantee or right to a lump sum settlement. A settlement is only achieved if both the insurer and the employee agree to a certain figure. In most instances an employer must consent to their insurance company making a settlement offer to an injured employee. A judge cannot order or set a lump sum settlement figure.

For a settlement to be approved by a judge, it must be found to be in the employee's best interest. By settling your case you are not giving up your rights to go back to work for the same employer. However, the law creates a presumption that you are unable to return to work for the same employer for whom you were working while you were injured. The presumed period of disability is one (1) month for every fifteen hundred dollars ($1,500.00) in settlement proceeds. For example, if you receive fifteen thousand dollars ($15,000.00) net from your settlement, it would be presumed that you are unable to return to work at your former job for 10 months and your former employer would not have to re-hire you for that 10 month period. This however does not prevent you from seeking work elsewhere. Also as a requirement for settlement approval, the employee must, if they are involved in a schooling program or some other vocational rehabilitation plan approved by the Workers' Compensation Board, have the consent of the Office of Education and Vocational Rehabilitation prior to having a settlement approved.

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