Court draws lines on ‘financial hardship’ in workers’ compensation recoupment

On Behalf of | Sep 6, 2014 | Workers' Compensation

One of the aspects of workers’ compensation in Pennsylvania that can be frustrating for those injured at work is recoupment. This refers to the ability of employers to gain back prior workers’ compensation payments to an employee. Often this is done by reducing benefits going forward. One of the protections for employees facing possible recoupment is that courts presume that recoupment will cause hardship when an employer waits two years or more to satisfy a notice obligation.

A recent case in Pittsburgh involving the issue of recoupment, specifically this hardship issue, resulted in a decision in favor of the employer. The workers in the case had injured his neck in 2005 while doing heavy lifting. The City of Pittsburgh paid him heart and lung benefits until he opted to take a disability pension, which effectively replaced the heart and lung benefits with workers’ compensation benefits.

The ultimate outcome of the case, at least on the issue of hardship, is that an employer’s decision to recoup benefits does not automatically mean that the employee is subject to a financial hardship. In this case, the employee had stated the recoupment-which was $50 less per week-made it difficult to pay his bills, but this didn’t prevent him from doing so. Some difficulty paying household bills doesn’t qualify as hardship, though.

The issue is an important one to be aware of, since anybody who receives workers’ compensation benefits could potentially be subjected to recoupment. When recoupment really does put significant financial stress on an injured employee, it is important for him or her to have the assistance of an experienced attorney who understands how to navigate the workers’ compensation system.

Source: The Legal Intelligencer, “Recoupment of Benefits Doesn’t Imply Financial Hardship,” Max Mitchell, August 19, 2014.