Injured workers who are awarded partial permanent disability benefits, and their surviving dependents who receive dependency benefits often ask why they must receive the payments in weekly installments and not in a lump sum. The answer is the Workers’ Compensation Statute requires that these payments be paid periodically and not in one lump sum. The basic theory behind this is that the payments are in lieu of wages, and are to be received by the injured employee or his/her dependents in the same manner in which wages are ordinarily paid.
There is a provision in the Statute which allows a portion or all of an award of benefits to be commuted, which means to be paid in a lump sum. However, this is very rarely allowed by the Compensation Court. The Statute emphatically states that a commutation is to be allowed only when it clearly appears that an unusual circumstance warrants a departure from the normal method of payment. The Statute clearly states a commutation is not to be allowed to satisfy debts or to make payments to physicians, lawyers or others. Because of these statutory restrictions, only in very unusual circumstances are commutations allowed by the Court. They are not allowed to pay bills, catch up on payments, etc., even in today’s economy.
