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Thread Title: objections to commutations on 100% award
Created On Monday February 23, 2009 4:03 PM


Cement
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Monday February 23, 2009 4:03 PM

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Are there any legitimate objections an employer can raise, on an applicant's request for a commutation, which would result in a uniform reduction of the weekly PTD rate? I received a request and I work for the self insured/self administered employer. The commutation amount being requested is $50k, the employee only submitted bills totaling $37k. The employer's question to me is that the commutation doesn't take into account the time value of the money being requested up front.
My response was to point out the 3% discount per annum that will result in the commutation. Can anyone assist me with this?

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Chirple@earthlink.net
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Monday February 23, 2009 4:51 PM

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Your only objections are in the Statute:

Applicant has not shown that commutation is in his/her best interest; must show how he/she intends to pay debts incurred prior to the injury; how he/she will survive on less weekly payment (note that any resulting increase in Social Security Disability payments based on reduced WC payments may be considered illegal/fraud, would be frowned upon and at a minimum would be not allowed."; that the Statutory scheme is intended to provide a stream of benefits to the applicant; request a hearing for the WCJ to consider all pre-commutation income/expense and post commutation income/expense before making this commutation Award.

If the commutation is to pay off debt, such as credit card debt, what assurances does the court have that the applicant will not create more debt and seek commutation again later. Just saving interest on the credit card debt is not enough, catching up on a mortgage w/out paying it off should not be enough, putting the applicant in a better position (ie paying off a mortgage) may be enough. It's the WCJ's call.

All you can do is object and request a hearing.

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steelmanlaw
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Tuesday February 24, 2009 3:48 PM

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chirple, good analysis. we see far too few of these issues litigated. that monies supporting the extended Award are treated as already belonging to the applicant as a matter of policy; it's just that the law doesn't say that in so many words. Cement's insured may want to litigate the issue at least at the Board level and make applicant satisfy his burden of showing that the commutation is in the best interests of A. in the long run, many gravely disabled IW's die early, before the commutation could be recouped and the insured is left holding the bag for benefits paid out early which, if not commuted, would have extended beyond date of death.

again, i don't see enough litigation of this issue; and it should not be that expensive: one conference and a trial. further, if chirple's applicant's is rewarded, then A may ask for another commutation when the extra $13K is blown in Pechanga. (no skepticism intended.)

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postscript2
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Tuesday February 24, 2009 4:25 PM

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As I recall, "gambling" debts are tax deductible...

Now as for the casinos--Would not the I/W have to report any significant winnings as earnings???

LCS

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RBaird
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Wednesday February 25, 2009 6:23 PM

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The statutes are set forth at LC 5100 et.seq. The relevant case law is discussed in Stew's invaluable Index, pp138-142. The crucial determination is "best interest" of the IW but this requires some evidence as to current finances and explanation of the need for a lump sum advance. The present value discount is set by statute at 3%; the tables are in the appendix to the Matthew Bender paperback Labor Code. The petition should be set for conference. Very few petitions for commutation require a trial or an F&A. Although I can see a self-insured (self-administered?) employer having a proprietary sentiment, the legal reality is that an award is a statutory trust and frankly, the interest of the IW usually outweigh the objections of the ER.

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steve appell
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Thursday February 26, 2009 12:28 PM

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You may only deduct gambling losses up to the amount of your gambling winnings

-------------------------
 Steve

A government which robs Peter to pay Paul can always depend on the support of Paul.
- George Bernard Shaw

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