Are L&I Workers’ Compensation Benefits Taxable?
No. The IRS considers time-loss compensation and other awards for your injury to be a disability benefit, not earned income, so income tax laws do not apply.
Additionally, Washington State tax does not apply to workers’ compensation benefits. You will not receive a W-2 or any tax notification documents.
However, if you are receiving workers’ compensationas well as Social Security disability income, there may be a tax notification.
What Is the Statute of Limitations (SOL) for L&I?
A statute of limitations (SOL) is a time limit that determines how long you have to make a claim to gain compensation for various injuries, such as personal injuries and workplace injuries. In Washington state, L&I or your self-insured employer (SIE)must receive your Report of Accidentwithin 1 year of your injury date to file a claim.Occupational illnessclaims must be receivedwithin two yearsfrom the date that your doctor notifies you in writing that your injury is work-related.
Don’t leave it until the last minute to file your L&I claim.as soon as possible to make sure you don’t run out of time.
What Is an L&I Settlement or Award?
To determine the value of your L&I settlement or award, you first need to understand the different types ofworkers’ compensationoffered in Washington state. L&I settlements and awards are paid out once theclaim is closed, though the total settlement or award amount paid upon claim closure depends on the size. L&I settlement and award amounts vary widely and typically fall into three categories:
1. L&I disability pension:Alife-long benefitawarded to injured workers who will never be able to return to any gainful employment due to a severe or life-threatening injury.
2. Permanent partial disability (PPD) award:A one-time sum paid to injured workers when their L&I claim is closed. The worker can re-enter the workforce following aPPD award.
3. Claim resolution settlement agreement (CRSA):Anwhere all parties agree to close an injury claim for a specified amount. When agreeing to this settlement type, the injured worker exchanges all future benefits, except medical, for the payment.
How Can I Check My L&I Claim Status?
To check on your L&I claim status, you must contact L&I via theL&I Claim and Account Centeror call the claim information hotline at800.831.5227. Be sure to have your claim number readily available.
Is L&I Insurance the Same as Workers’ Compensation?
While L&I is the primary form ofworkers’ compensationin Washington state, it is not the only option. Employers can pay for their own self-insurance if they meet certain requirements. Regardless of your coverage, your worker’s rights to will not change. However, the management of your claim will differ. If your coverage is through self-insurance, you will have to go through your employer rather than L&I to complete yourworkers’compensation claimand receive your benefits.
What Is an L&I Disability Pension?
Anis a special category of pension only awarded to the mostseverely injuredworkers. If you are eligible for an L&I disability pension, you will receive a non-taxable payment every month for the rest of your life.
Under Washington state law (WAC 296-14-150), gainful employment is defined as a regular occupation (in any position) for income, salary, or wages. If your doctor or Vocational Counselor says that you cannot ever work again because of a job-related injury or illness, you may be entitled to Washington State Labor and Industries pension benefits.
It’s not easy to be granted an L&I disability pension — you must be committed to the process. As these lifetime benefits are so valuable, the system is set up to derail your claim at every step along the way.
The process involves complicated bureaucratic hurdles and red tape, along with consultations with L&I Claims Managers, employers, Vocational Counselors, and Independent Medical Examiners who do not always have your best interests in mind. These parties have blocked many workers before you and will try to stop you from securing an L&I pension. Anwith a proven track record of avoiding those traps is your best bet for successfully navigating the system.
How Do I Qualify for a Washington State L&I Disability Pension?
You may receive a monthly L&I disability pension if you are certified as permanently and totally disabled, AND:
- The medical and vocational evidence finds that your injury prevents you from becoming gainfully employed, OR
- You have lost, or lose the use of, both legs, both arms, an arm and a leg, or your vision.
If I Qualify, Can I Increase My Chances of Receiving an L&I Disability Pension?
You can increase your chances of receiving. By obtaining a favorable medical opinion and showing what you have done to help yourself so far, you can provide the necessary information needed to prove your claim.
There are also factors — specific to only you — such as your age, education, and work experience that can be helpful in increasing your chances of receiving an L&I disability pension.
- Age: Being more advanced in age is beneficial to your claim. The older you are, the less chance you have of being able to learn a new skill or job.
- Education:The less education you have, the better for obtaining a pension. Without a degree, you do not have certain qualifications employers seek during the rehiring process.
- Work experience:A smaller amount of work experience rather than a long-term career shows that you do not have as many transferable skills.
What Is Permanent Partial Disability (PPD)?
In Washington state,permanent partial disability (PPD)is broadly defined as a physical or mental impairment arising from an injury that is fixed, lasting, stable, and can’t be improved with further medical treatment. When your injury can be classified as a permanent partial disability, you are entitled to workers’ comp permanent partial disability benefits and compensation for damages.
Common Injuries Cause Permanent Partial Disability
There are many common workplace injuries that could lead to PPD, including:
- Amputation,
- Back injury,
- Cardiovascular orrespiratory disease,
- Depression,
- Hearingor vision loss,,
- Knee injury,
- Musculoskeletal disorders,
- Post-traumatic stress disorder (PTSD), and
- Shoulder Injury.
How Are Permanent Partial Disability Awards Paid?
PPD awards are based on the type of injury and the level of severity of the injury and are measured by animpairment ratingcalculated with theL&I PPD Awards Charts. In general, the higher the rating, the bigger the payout.and the right doctor are usually the winning combination to unlocking the maximum amount ofto which you are entitled.
- Permanent partial disability in Washington state is calculated when L&Icloses your claim.
- Your impairment is rated by a doctor or your attending physician during a PPD rating exam, followed by an approved L&I doctor during anIndependent Medical Exam (IME)once you have reached maximum medical improvement (MMI).
- You will receive your award after you get medical care for your injury, become employable, get a rating exam, and have your claim closed by L&I.
- If the award amount is less than three times the state’s average monthly wage at the date of injury, L&I or the self-insured-employer (SIE) sends a check for that amount.
- If the award exceeds more than three times the state’s average monthly wage at the date of injury, L&I or the SIE makes a down payment. They then pay the balance of the award once a month in installments equal to the worker’s monthly time-loss compensation (at the time of closure).
Do Temporary Workers Get L&I Benefits?
Under Washington state’s L&I laws, it doesn’t matter whether you’re a temporary or permanent worker — if you’re injured on the job, you may be eligible for. Even if you were recruited by another agency and ended up working temporarily for a third party, you can file anwith the employment agency instead of the place of business where the injury occurred.
Third-Party Claims
If injured by a third party in Washington state, workers cannot sue their employer for compensation. However, when injuries are caused by defective products or machinery, or by someone who is not a co-worker, you may be able to file athird-party claimto cover the costs of your injury.
What Is a Third-Party Claim?
Athird-party claimis one in which someone other than your employer or co-worker is responsible for your injury. If you have been injured on the job due to someone else’s actions or negligence, you may be entitled to additional compensation through a third-party claim, which combines yourwith apersonal injuryclaim using the same facts.
Unlike workers’ compensation payments, there is no limit to the amount of compensation an injured worker may seek in third-party damages. Third-party claims are private matters and are typically litigated directly with theWashington State Superior Court.
Who Is at Fault for a Workplace Injury?
L&I is a no-fault system, ensuring compensation for any workplace injury. However, if a third party is involved in causing the injury, you may be able to pursue legal action against them for additional compensation underthird-party claims.
Can I Hire an Attorney to Represent Me for a Workers’ Compensation L&I Claim?
All Washington state workers have the right to be represented by an attorney in a workers’ compensation claim. If your injury prevents you from doing significant parts of your job or makes it difficult to work, ancan be very helpful in advocating for the full amount of benefits to which you are entitled based on your injury’s severity.
You may need aworkers’ compensation attorneyif:
- You or your loved one suffered a workplace injury or occupational illness.
- Your employer is not supportive of your L&I claim.
- Your workers’ compensation claim or benefits were denied.
When looking for aworkers’ compensation attorney, make sure to find someone with a track record of positive results who can build a case and gather evidence to present your claim as effectively as possible.
Can I Get an Overpayment With L&I?
An L&I overpayment occurs when the insurance company pays you more than what they’re obligated to provide. This is often not the fault of the claimant, but rather due to clerical errors or incorrect data. In the case of willful misrepresentation by the claimant, L&I can demand repayment plus a 50% penalty.
What Does Overpayment Mean for You?
If you have received an overpayment from L&I, you will owe the overpayment amount back to them.
The insurance company will send a letter explaining what it is attempting to recover, how much you owe, and why it is making the attempt. You are entitled to an explanation of the insurance company’s reasoning for this offset and any other information on the overpayment or its status.
If you don’t repay the L&I overpayment, you could be sued by the insurer. Any judgment against you could result in a lien placed on your property and may be reported adversely to credit bureaus.
