How Much of My Workers’ Compensation Amount Will Do I Keep?
Your employer’s workers’ compensation policy can be a lifesaver if you suffer from a workplace injury or illness. The compensation amount can pay for your medical expenses and lost wages, even if the accident wasn’t your fault.
However, may not know a few things:
- You don’t receive your benefits immediately
- You have to go through appeals and negotiation settlements before the final resolution of your case
- When you eventually receive your benefits, others like your lawyer, doctors, and government agencies will claim some money
That’s why it’s better to know how much of your workers’ compensation amount you get to keep. This way, you won’t be surprised when you later see money deducted from your settlement or award.
Deductible Expenses From Your Workers’ Comp Amount
1. Your Burbank Workers’ Compensation Attorney’s Expenses
Workers’ compensation lawyers in Burbank charge a contingency fee where they receive a percentage of your benefits. However, they receive payment only if and when you win the settlement.
Of course, there’s a fixed percentage set for the limit, and it’s usually the judge who approves the fees.
You will also have to reimburse advance payments your lawyer made, like the cost of copying your medical records or hiring expert witnesses.
Attorneys generally deduct these expenses before calculating their fees. However, some lawyers calculate their rates based on the total award before deducting these costs.
So it’s better to check this before signing your lawyer agreement.
2. Pending Medical Bills
Some doctors agree to postpone payment of your medical bills till you receive your workers’ comp award. This is called a doctor’s lien, and if this happens, your workers’ comp award pays for your pending bills.
In some cases, your lawyer may make negotiations wherein the insurance company directly pays specific medical bills. It’s usually a lump sum paid for medical bills.
In this case, your lawyer may withhold some money and negotiate with the medical providers to lower the bills. If they agree, you stand to receive more of your settlement amount.
Of course, you needn’t worry about all this if you don’t have any pending medical bills. In this case, you get to keep the amount earmarked for these bills.
You generally needn’t pay state or federal taxes on your workers’ compensation settlement amount. However, there is one exception- when you also receive benefits through social security disability insurance (SSDI).
Here if your combined workers’ comp and SSDI benefits are high enough, then it may reduce the SSDI benefits. This is called an offset, and you will have to pay taxes for it.
Your workers’ comp settlement may also affect your tax credits qualification. It’s because the IRS considers the settlement amount to be an income source while determining your eligibility for these credits.
4. Permanent Disability Advances
States like California let you receive permanent disability payments even before settling your workers’ comp claim. The insurance company has to start making payments within 14 days of your last temporary disability payment.
Any permanent disability advance you receive is deductible from your workers’ compensation settlement amount.
5. Additional Expenses
There are some other additional expenses that may be deducted from your worker’s comp benefits. Like paying any overdue child support you may have.
Medicare doesn’t usually cover the medical expenses that are payable through workers comp. However, it may cover your medical bills if there are some problems with your workers’ comp claim.
So if you have Medicare, you must repay Medicare for conditions payments made during your appeal.
With so much affecting how much workers’ compensation amount you can keep, there’s a chance of your missing a few things.
And if you do, you will end up surprised when you receive your workers’ compensation settlement.
That’s why it’s better to claim with the guidance of an expert Burbank workers’ compensation attorney. They will help with so many things. Like estimating how much you need for future medical expenses, negotiating for reduced medical bills, and negotiating a fair settlement.