When you have battled your workers compensation case, and you have won your award, you can almost be sure that you won't pocket the whole check. Different things can reduce the amount you eventually receive; some are inevitable while others depend on the circumstances of your case. Here are three examples of these factors:
SSA Offsets and Taxation
Generally, workers compensation benefits aren't taxable either by state or federal governments, but there are exceptions to this rule. For example, a portion of your workers compensation benefits may be taxed if you are also receiving Social Security Disability Insurance (SSDI) benefits or Supplemental Security Income (SSI) benefits.
If you receive both workers compensation and SSDI payments, the Social Security Administration (SSA) may reduce (technically offset) your payments so that the combined payments don't exceed a preset maximum. At the same time, the amounts by which your payments have been reduced become taxable. For example, if SSA decides to reduce your payments by $1,500, this amount then becomes taxable.
Apart from SSA offsets and taxation, liens on your workers compensation may also reduce the value of your award. A lien is a claim for reimbursement that another party may place on your workers compensation award.
Consider an example where you file both workers compensation and personal injury claims. If you win both claims, the total amount may exceed your damages or benefits. The workers compensation insurer, therefore, can lay a claim to a portion of your personal injury award so that you don't get paid for the same damage twice. For example, if the personal injury award pays $2,000 for your treatment and workers compensation also gives you the same award, workers compensation can lay a claim on your injury award so that it is reimbursed for this portion of their benefits.
Legal Fees and Costs
Lastly, you should know that workers compensation lawyers work on contingency basis just like personal injury lawyers. This means that they get a percentage of your award if they help you win your case. The exact percentage depends on different issues such as state laws and the amount of the award. For example, a workers compensation lawyer in Minnesota can charge 25% for the first $4,000 and 20% for the next amount up to $60,000, but the total fee cannot exceed $13,000.
The good news is that there are different ways of minimizing these costs so that they don't eat into your benefits too much. For example, the attorney fees may be negotiable, which means you should negotiate with your attorney before the case begins. The liens may also be negotiable; your lawyer can negotiate with workers compensation so that they don't take the whole amount due. Talk to your workers compensation lawyer to get more information about maximizing your settlement.