Commutation of Workers’ Compensation Benefits Offers Lump Sum Payment to Help Injured Workers When Necessary

Workers' Compensation Claim FormSuffering an injury at work can be very frustrating, especially if it prevents an employee from going to work and earning a living. Workers’ compensation benefits exist to help injured workers maintain a stream of income even when they cannot work. When these benefits are approved, they are typically paid on a monthly basis. However, in some cases, the workers’ compensation board will grant a commutation of benefits. This means the injured employee can receive a one-time, lump sum payment.

When Commutation of Benefits Is Appropriate

In Delaware, a commutation can be granted if the workers’ compensation board determines it is in the best interest of the employee or a deceased employee’s dependents. Reasons that compel the board to approve the commutation include:

  • It will help the employee to avoid undue hardship or expense.
  • The employee has already or will be moving outside the United States.
  • The employer has sold or disposed of the employee’s assets or business.

A commutation will not be granted to satisfy a debt incurred by the injured worker before the illness or injury, other than a mortgage payment.

Types of Commutation

There are two different types of commutation. They are:

  • Full commutation – Full commutation pays all present and future benefits in one payment. In this case, the commutation is typically a final award. Injured workers may not be able to obtain any additional reimbursement for further complications of the injury or illness. Therefore, the decision to pursue a full commutation should take into consideration the type of disability and whether it is likely to cause additional problems in the future.
  • Partial commutation – Partial commutation pays a portion of the remaining benefits in a single payment. This type of commutation can preserve eligibility for future benefits.

Every workers’ compensation case is unique, and commutation may not be beneficial to the injured worker in all cases. A skilled attorney can help an injured employee evaluate his situation and decide what the best course of action is.

If you are receiving or are eligible to receive workers’ compensation payments and you think commutation would help you, we invite you to contact us to speak with a member of the Morris James legal team.