Worker's unchanged income sinks lump-sum disability award

In South Dakota, a permanently and totally disabled employee may be entitled to a lump-sum award of future disability benefits if she establishes an exceptional financial need that arises from her reduced income due to the injury.

Case name: Stuckey v. Sturgis Pizza Ranch, No. 25605 (S.D. 01/12/11).

Ruling: The South Dakota Supreme Court held that a worker was not entitled to a lump-sum award of future disability benefits.

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What it means: In South Dakota, a permanently and totally disabled employee may be entitled to a lump-sum award of future disability benefits if she establishes an exceptional financial need that arises from her reduced income due to the injury.

Summary: A worker for a pizza restaurant was injured when her hand was crushed in a machine used to flatten pizza dough. The worker returned to work following her injury. However, her condition deteriorated significantly, and she became unable to care for herself, her family, and her residence. At the time of her injury, the worker was the primary wage-earner for her family and the primary caretaker of her 13-year-old daughter and disabled husband. The restaurant agreed that the worker was permanently and totally disabled. The South Dakota Supreme Court held that the worker was not entitled to a lump-sum award of future disability benefits.

The court said that the state's workers' compensation law does not favor lump-sum awards and that the primary emphasis is on providing an injured worker with a reliable stream of income to replace lost wages. A worker can be awarded a lump sum for future disability benefits only if the award is in her best interest and she demonstrates an exceptional financial need. Here, the worker's income remained the same, and the worker did not demonstrate that her financial need rose as a result of her injury.

The court also approved a "life care plan" for the worker. The court said that the use of the term "life care plan" added confusion. The plan set out a course of treatment for the worker but did not include an award for future medical expenses. The court said that when the worker incurs medical expenses in the future, the restaurant can reimburse her or challenge the expenses as not necessary or suitable and proper.

Read more at the WorkersComp Forum homepage.

February 28, 2011

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