This article was updated on 12/09/2024
Known as Compromise and Release payments or for short C&R, workers' compensation lump sum payments are one-time payments given to injured employees following a work-related accident instead of weekly or bi-weekly payments or structured settlements. These are paid out in installments over a predetermined period.
While they have advantages, workers' compensation lump sum payments are not the best option for injured employees in all circumstances. It may even be a bad thing for the injured employee. All of this is because of those who may incur future medical costs due to their job accident.
In this article, we’ll look at the pros and cons of workers' compensation lump sum payments so that you can negotiate an arrangement that works best for you.
Advantages of One-Time Payments
A workers' compensation lump sum payments may be beneficial in the following circumstances:
- As a result of your accident, you are not recuperating any further or have reached the end of your recovery, which implies that you will not incur more medical costs. The lump amount provided will cover all of your previous and present expenses.
- You should consider accepting the settlement offer if the money offered will provide you with financial security while getting better. Everyone involved, including you, your doctor, and your lawyer, agrees that the amount requested is sufficient to support you.
Accepting a workers' compensation lump sum payments settlement offer makes sense if your doctor does not believe you will need further medical care due to your work-related injury in the foreseeable future.
The Disadvantages of workers' compensation lump sum payments
Here are several indications that accepting a lump sum offer is not the best course of action:
- If you are still in the early stages of recovering from your injury, determine the amount of money you will require to recover fully. The lump sum settlement may be for less than you require to recover. If your health worsens, and you require more medical treatment in the future, you will be liable for the expenses. In such a scenario, weekly benefits may be the most appropriate option.
- If there is an excellent probability that your work-related injury will necessitate future medical treatment, a lump sum settlement is certainly not the best option. In exchange for accepting a lump sum settlement, you renounce your right to file a reopening lawsuit in the future. That's to say, if you require additional money to pay for future medical procedures, you will be solely liable for those expenses.
- If your injury is long-term or permanent, you may be able to receive benefits via Social Security disability. Choosing to receive a lump sum payment may give you a reduction in the number of disability benefits you get. You should consider this before deciding whether to accept it, particularly if you will be getting workers' compensation payments and Social Security Disability benefits at once.
- You anticipate future advantages, such as pension contributions. A lump-sum settlement may affect the value of anticipated pension amounts when you reach retirement age. If you receive workers' compensation lump sum payments, these are significant concerns for your future financial security. Besides, you should not take them lightly when deciding how to accept your money.
Waiting until later in your rehabilitation timeline before accepting a settlement may be preferable in the long run.
What to Do If You've Been Offered a One-Time Payment
You should be aware that you are not obligated to accept a workers' compensation lump sum payments, and you can negotiate with the insurance provider to receive compensation under different terms. However, consult a good workers' compensation attorney to guide you through the procedure.
If you have not yet received a long-term diagnosis for your injury, take note of the following. It may be helpful to consult with your doctor before taking a lump sum payment. Inquire whether you will be able to return to work and whether there will be any long-term consequences or disabilities resulting from the accident. Consider that the injury may worsen over time, necessitating further medical attention.
Final Thoughts
You will navigate the workers' compensation system more successfully with an attorney. Also, you will have more bargaining power in discussions to achieve a settlement arrangement.
If you are searching for a good workers' compensation lawyer, go to Pacific Workers, the Lawyers For Injured Workers will ensure you have the best team to help address your needs. Call us at 888-740-6434 for a free consultation!
About the author
Bilal Kassem President and Co-founder
Introducing Bilal Kassem, the visionary leader of Pacific Workers. His unwavering commitment to excellence, empowering others at the core of our organization. With a flair for creativity, Bilal infuses fresh ideas into every initiative we take.
Drawing inspiration from captivating stories like “Goosebumps”, he guides our team with determination. Beyond his professional endeavors, Bilal embraces the great outdoors. As a result, relishing adventures such as backpacking and exploring uncharted territories. Sushi is his preferred treat, nourishing both his body and spirit.
In his free time, he enjoys hitting the gym and indulging in blockbuster films. Also, he finds motivation in the legacies of historical figures like George Patton. By leading with empathy, Bilal fosters a supportive atmosphere. This is why every team member feels empowered to excel.