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
appropriation.
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,
2011.
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 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.
