In the vast majority of L&I claims, receiving an award of total permanent disability, otherwise known as an L&I pension, is the most valuable benefit available under the Industrial Insurance Act (RCW Title 51) because it ensures monthly disability payments for the entirety of an injured worker’s life and, in certain instances, the life of the worker’s surviving spouse and/or legal dependents.
This is not to say a pension is universally an ideal outcome because it necessarily means the worker has suffered a catastrophic injury, enduring severe physical limitations, likely unrelenting pain and emotional turmoil, and eradicated earning capacity. Even so, a pension can provide at least some modicum of financial security when returning to work is not possible.
What Is an L&I Pension?
A pension is similar to bimonthly time loss compensation but, whereas time loss payments are issued every 14 days and are meant to be only temporary while the worker receives treatment for the injury while restricted from work, a pension should be awarded when the worker’s industrial injury or occupational disease has reached “maximum medical improvement” – meaningful improvement is no longer expected with treatment – and the worker is deemed unable to return to work on a permanent basis. The Department of Labor and Industries issues a single pension payment on the 14th of each month.
It is important to keep in mind an injured worker cannot receive both an L&I pension and a permanent partial disability (PPD) award at the same time. One cannot be simultaneously permanently, partially disabled and permanently, totally disabled. In the event an injured worker has received a PPD award in the past, it may be deducted from the pension reserve or, at the very least, reduce the monthly amount an injured worker receives until the PPD award is repaid to the Department or self-insured employer. More on this later.
Am I Eligible for an L&I Pension?
To receive an L&I pension, an injured worker must meet the following conditions:
- The worker must have an allowed L&I claim.
- The worker must be considered permanently unable to return to work in any capacity. This considers both physical restrictions and mental/cognitive limitations, in addition to the impact of preexisting limitations and infirmities, that severely limit or preclude their ability to obtain and perform any kind of gainful employment. The industrial injury or occupational disease need only be a cause and not the sole or even primary cause of the worker’s permanent disability.
- There must be sufficient medical evidence supporting the worker’s inability to work due to the industrial injury or occupational disease. This evidence can come from the attending physician, other treating physicians or medical consultants, and/or vocational experts, and even statements from the worker, family members, and/or friends can be helpful.
- A vocational assessment is often required. The assessment is conducted by a vocational expert usually assigned by the Department of Labor and Industries or self-insured employer and must address whether the worker is capable of (a) returning to their job-of-injury, (b) modified or light duty work for the employer-of-injury or other employer, (c) alternative physically-suitable work available in the labor market based upon the worker’s relevant transferrable skills, or (d) benefiting from retraining in a physically suitable occupation available in the labor market. If the answer to each of these questions is “no,” the worker is eligible for an L&I pension.
Once approved, the pension provides monthly payments to the worker for life. If the worker passes away, the worker’s spouse or dependents may continue to receive benefits, too.
Will My Medical Benefits Continue after I Start Receiving a Pension?
Generally speaking, the Department will not pay for any further treatment once a worker is placed on pension. This means the worker must find alternative insurance for paying for medical treatment of their industrial injury or occupational disease or be prepared to pay out-of-pocket for medical expenses. There are very limited exceptions for continuing medical treatment under a claim after receiving a pension, which require complicated legal and evidentiary maneuvering. If you have questions about whether you qualify for a pension with ongoing medical benefits, please feel free to contact our office to speak with an attorney.
What Happens After Receiving a Pension?
In both State Fund and self-insured claims, the Department of Labor and Industries is the only entity with authority to decide an injured worker’s pension entitlement. The Department will notify the injured worker of their award of a pension in an official order or notice of decision. With the order is a pension benefits questionnaire asking the worker to verify their marital status and number of dependents, if any. The Department will also request the worker to provide a copy of their marriage license and birth certificates for any dependent children.
Once this information and documentation is received, the Department will then request the worker select how they prefer to receive their pension payments. If the worker is single, they will be provided only one option: monthly payments at their full pension rate. If the worker is married, they will be provided three options: monthly payments at their full pension rate, an actuarially-reduced rate which shall continue throughout the life of the surviving spouse or dependent, or an actually-reduced rate which shall continue at one-half of the payment amount throughout the life of the surviving spouse or dependent.
Once the pension option is made, the worker is placed on the L&I pension rolls and will begin receiving monthly pension payments.
Meanwhile, time loss payments continue until the pension effective date to avoid any interruption of disability benefits.
Can I Appeal If My Request for a Pension Is Denied?
Absolutely! However, the order or notice of decision indicating an injured worker’s claim has been closed without an award of total permanent disability MUST be protested or appealed within 60 days of the date the worker receives the notice. It is wise to protest or appeal the decision well before the 60-day deadline to avoid the decision becoming final and binding. It is also strongly recommended to consult with an attorney to avoid jeopardizing or forever time-barring a pension claim.
How Much Will My L&I Pension Pay Me on a Monthly Basis?
In most cases, an injured worker’s monthly pension rate mirrors their monthly time loss compensation rate since both are based upon the worker’s average monthly wages at the time of their industrial injury or the manifestation date of their occupational disease.
However, the following situations may impact the worker’s monthly pension amount:
- The worker will lose each dependent’s 2% entitlement relative to either time loss compensation or L&I pension payments once the dependent reaches age 18 or age 23 if enrolled in school on a full-time basis.
- If the worker has received a PPD award in the past, the Department will demand reimbursement either in installments deducted from each monthly pension payment until the entire amount is satisfied or from the pension reserve, which will permanently reduce the worker’s pension amount for the life of the pension.
- If the worker receives Social Security Disability Insurance (SSDI) benefits, the Department will reduce the monthly L&I pension payment to prevent “double-dipping” where the worker might otherwise receive full benefits from two different sources. The offset typically applies until the worker reaches full retirement age when the offset rules change.
- Each July 1st, the Department will increase the monthly pension payment amount for cost-of-living (unless the worker also receives Social Security in which case the Social Security Administration will adjust SS benefits for cost-of-living every three years).
- The Washington State Department of Social and Health Services can place a lien for unpaid child support or public assistance benefits against an injured worker’s pension payments under certain circumstances.
Can I Work While Receiving an L&I Pension?
This question may seem odd since only those injured workers unable to work on a permanent basis are qualified to receive an L&I pension. However, in some cases, a worker may be capable of part-time work even if it is not full-time work. Or the worker may be interested in volunteering for an employer or non-profit organization, which can be considered work-like activity and typically precluded by a pension.
There is no definitive answer to this question. If a worker is interested in attempting some type of employment or volunteer activity after receiving a pension, they should contact their L&I pension benefits claims manager to discuss the specific type of work and how they believe they can perform such work or volunteer activity if they simultaneously believe they are incapable of regular work. Needless to say, if the worker does not disclose return-to-work efforts or engages in activity that could be construed as “reasonably continuous and gainful employment,” they risk not only the termination of their pension benefits but significant monetary penalties that could result in complete and utter financial devastation and even criminal prosecution.
