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Tuesday, December 3, 2013

NJ COLA Bill - Legislative Hearing Scheduled

The NJ Senate Budget and Appropriations Committee will hold a public hearing on a pending COLA bill S613 to increase benefits on 12/5/2013 1:00:00 PM.

The Senate Labor Committee report

The Senate Labor Committee reports favorably and with

committee amendments Senate Bill No. 613.

As amended by the committee, this bill provides, from July 1, 2013

forward, an annual cost of living adjustment (COLA) in the weekly

workers' compensation benefit rate for any worker who has become

totally and permanently disabled from a workplace injury at any time

after December 31, 1979 and for the surviving dependents of any

worker who died from a workplace injury after December 31, 1979.

The COLA would be an amount such that, when added to the

workers' compensation weekly benefit rate initially awarded, the sum

will bear the same percentage relationship to the maximum benefit rate

at the time of the adjustment that the initial rate bore to the maximum

rate at the time of the initial award, except that:

1. The bill reduces the amount of the adjustment as much as

necessary to ensure that the sum of the adjustment and the amount

initially awarded does not exceed the amount which would cause any

reduction of disability benefits payable under the Federal Old Age,

Survivors and Disability Act; and

2. The bill reduces the supplemental workers’ compensation

benefits (but not regular workers’ compensation) for claimants injured

after 1979 by the amount of any Social Security benefits (other than

Social Security disability benefits and any increases in Social Security

benefits due to federal statutory changes after May 31, 1980), Black

Lung benefits, or the employer’s share of disability pension payments

received from or on account of an employer, except that if the worker's

original workers' compensation award was already reduced under

current law, there would be no further reduction of the supplemental

benefits under the bill.

These reductions parallel the reductions provided under current

law for claimants who were injured before 1980. The bill also

provides that no supplemental benefits would be paid in any case

where they are calculated to be less than $5 per week.

Current law requires such annual adjustments in the rate of

workers' compensation benefits for death and permanent total

disability to be paid from the Second Injury Fund (SIF), but only for

cases of injury or death occurring before January 1, 1980. The bill

extends the adjustments paid from the SIF to claims originating after

December 31, 1979, although the adjustments would apply only to

benefits paid on those claims after July 1, 2013, thus avoiding a

backlog of retroactive benefits.

The bill provides that supplemental payments will commence only

after SIF assessments are sufficient to pay them without using General

Fund money. The supplemental benefit payments would start on July

1, 2013 and the Department of Labor and Workforce Development is

required to take into account the supplemental benefits when

calculating the amount of the Second Injury Fund assessment which

starts on January 1, 2013, thus avoiding the need for any General Fund


To avoid an abrupt fiscal impact on the workers’ compensation

system, the bill provides that one third of the supplemental benefit rate

be paid during the first year, two thirds of the rate be paid during the

second year and the full amount be paid during the third and

subsequent years.

The bill sets time limits for workers’ compensation insurers and

self-insured employers to notify the SIF when supplemental workers’

compensation benefits are required under the bill. An insurer or selfinsured

employer is required to provide the notice not more than 60

days after the supplement is awarded or voluntary payment is to begin.

If a failure to notify results in the payment of an incorrect amount of

benefits, the liability for the payment of the supplemental benefits is

transferred from the SIF to the insurer or employer until the required

notice is provided.

The bill makes no change in the provisions of sections 1 and 9 of

P.L.1980, c.83 (C.34:15-95.4 and 34:15-95.5), which provide for the

reduction of certain portions of workers' compensation benefits by the

amount of Social Security disability benefits paid. In addition, the bill

expressly states that the supplemental benefits shall not be paid in a

manner which in any way changes or modifies the provisions of those

sections. The bill, therefore, will have no effect on existing provisions

of State and federal law regarding offsets between workers'

compensation and federal Social Security disability benefits.

The committee amendments provide that the application of the cost

of living adjustment commence on July 1, 2013, instead of July 1,


This bill was pre-filed for introduction in the 2012-2013 session

pending technical review. As reported, the bill includes the changes

required by technical review, which has been performed.

Jon L. Gelman of Wayne NJ is the author NJ Workers’ Compensation Law (West-Thompson) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thompson). For over 4 decades the Law Offices of Jon L Gelman  1.973.696.7900  have been representing injured workers and their families who have suffered occupational accidents and illnesses.