Workers' Compensation: Bill Proposes to Increase Benefits for Some Injured Workers and Dependents

Assemblywoman Dawn Fantasia filed legislation to institute additional workers' compensation supplemental benefits on June 13, 2024, and Assemblyman Inganamort co-sponsored it.

This bill proposes to increase workers' compensation benefits for permanently disabled workers and dependents of deceased workers who died from work-related injuries. The increase is designed to keep pace with inflation (COLA).

Key points:

Applies to those permanently disabled after 1979 and dependents of those who died after 1979 (except public safety workers and dependents already covered by other legislation).
Annual COLA adjustments begin July 1, 2025.
Funded from the General Fund, not the Second Injury Fund (SIF) like pre-1980 cases.
Phased implementation: 1/3 benefit in year 1, 2/3 in year 2, full benefit in year 3 and onwards.
Benefit amount is reduced by some Social Security benefits and employer disability pensions.
Bill does not affect existing offsets between workers' compensation and Social Security disability benefits.

Assembywoman
Dawn Fantasia [R]

This bill provides, from July 1, 2025, 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, except the COLA provided in this bill does not apply public safety workers and their dependents who already receive a COLA pursuant to P.L.2019, c.127, or to dependents of essential employees who died from COVID, who receive a COLA pursuant to P.L.2021, c.55. This adjustment is intended to mirror, to the extent possible, the COLA already in place for benefits arising from an injury occurring before 1980.

The bill provides for the COLA to 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 Social Security disability benefits;

(2) in cases which are not subject to the provisions of point one above, 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 cost of living increases in Social Security benefits), Black Lung benefits, or the employer's share of disability pension payments received from or on account of an employer;

(3) the bill requires that the COLA benefits will not be paid to any individual who elects to not receive benefits under the Federal Old Age, Survivors and Disability Insurance Act for which the individual is eligible; and

(4) The bill requires that the COLA increase portion of the benefit increase be funded out of the General Fund.

These reductions parallel the reductions provided under current law for claimants who were injured before 1980. The bill also provides that no supplemental benefits will be paid in any case in which 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 apply only to benefits paid on those claims after July 1, 2025 to avoid a backlog of retroactive benefits.

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 (fiscal year 2026), two-thirds of the rate be paid during the second year (fiscal year 2027), and the full amount be paid during the third year (fiscal year 2028) and subsequent years.

The cost of living supplement that the bill provides to an individual for total permanent disability or survivor's benefits under workers' compensation will be reduced by the original amount of that individual's periodic Social Security survivor's or retirement benefits, but not reduced by subsequent cost of living increases in those Social Security benefits. In the case of an individual who initially received Social Security disability benefits and later receives Social Security retirement benefits, or who dies and has dependents who receive Social Security survivors' benefits, the workers' compensation supplement will then be reduced by the amount of the Social Security retirement or survivor benefits, exclusive of any cost of living increase in those Social Security retirement or survivor benefits.

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 self-insured 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.

Click here to read legislation A4559

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Recommended Citation: Gelman, Jon L., Bill Proposes to Increase Benefits for Some Injured Workers and Dependents, www.gelmans.com (06/15/2024)

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*Jon L. Gelman of Wayne, NJ, is the author of NJ Workers’ Compensation Law (West-Thomson-Reuters) and co-author of the national treatise Modern Workers’ Compensation Law (West-Thomson-Reuters). For over five decades, the Law Offices of Jon Gelman 1.973.696.7900
jon@gelmans.com has represented injured workers and their families who have suffered occupational illnesses and diseases.