Michigan workers’ comp lawyer discusses retirement and how it can impact settlement.
It is common for employees on workers’ comp to think about retirement. Many of them have been doing physical labor for years and now find themselves unable to perform the essential duties of their jobs. Does workers’ comp count towards retirement? The answer is going to depend upon the specific pension plan.
Does workers’ comp count towards retirement in Michigan?
In Michigan, a workers’ comp settlement can be used for any purpose and that includes setting that money aside and counting it as money for your retirement. However, we advise our clients not to retire until a settlement has been negotiated. This is because retirement can act as forfeiture of wage loss benefits. The idea is that a person is no longer disabled from their job but took a voluntary retirement instead. It is critical to speak with an experienced workers’ comp attorney before retirement.
Some pension plans give time to employees who are disabled from their jobs while they are on workers’ comp. It is important to make sure that a pension is fully vested before accepting a settlement through workers’ comp. Employees are generally required to sign a waiver of seniority when settling workers’ comp and this might act to limit pension rights.
Does retirement age count towards and impact a workers’ comp settlement in Michigan?
Employees hurt on-the-job are entitled to 80% of their after-tax average weekly wage. In Michigan, retirement age can count towards and impact a workers’ comp settlement because the amount paid can be reduced by 5% each year starting at age of 65 for a maximum reduction of 50% at age 75.
Insurance companies can also use Social Security retirement benefits to reduce what is paid under workers’ comp. They can take a maximum of 50% of your Social Security retirement benefits and use that amount as an offset. Employees who were already on Social Security retirement benefits when the workplace accident occurred cannot have their workers’ comp benefits reduced by more than 50%.
Insurance companies are not permitted to reduce workers’ comp based upon both age and Social Security retirement benefits. They must select one method and it is usually the most beneficial to their interests.
Employees who receive a pension might also find their workers’ comp reduced. It is going to depend upon the language contained in the pension documents. That should also be outlined in the plan documents. In Michigan, if your retirement plan consists of a pension and you are thinking about taking that pension while negotiating a workers’ comp settlement, we recommend speaking with an attorney before taking any pension to make sure that receipt will not count towards and impact payment of workers’ comp benefits and/or settlement.
Can you retire while on workers’ comp in Michigan?
In Michigan, employees can give up their job and retire as part of a workers’ comp settlement. It must be carefully negotiated because settlement can impact retirement benefits. We recommend speaking with the union, plan administrator, or HR department before accepting any settlement.
Have questions? Call our attorneys now!
If you are injured on the job in Michigan and have questions on how a workers’ comp settlement can impact or count towards retirement, call now or fill out our contact form for a free consultation to discuss retirement and settlement. There is no fee unless you receive additional money. Don’t leave money on the table or jeopardize future health insurance benefits by failing to get answers beforehand.
Our attorneys have been exclusively helping injured workers in Michigan for more than 35 years. Our attorneys can help you better understand Michigan work injury laws and what happens after someone has been hurt on the job. To see what our own clients have to say about the caring, compassion, and communication they received from us, you can read in their own words about their experience here on our testimonials page from clients we have helped.
Michigan Workers Comp Lawyers never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 35 years. Call (844) 201-9497 for a free consultation today.