In Michigan, a workers' comp advance payment can end up costing more than expected, which is why a full settlement is usually the better option.
Michigan law allows an individual who is currently receiving workers' comp wage loss benefits to ask for advance payment. If the employer and its insurance company agree, weekly checks will be reduced until the money advances are paid back. Most employers and insurance companies will refuse advance payment. This is because there is no guarantee that benefits will continue because disputes are common. A magistrate can order an advance payment under certain circumstances.
Michigan workers' comp requirements for advance payment
A magistrate will consider the best interests of the injured worker and weigh them against the rights of the employer/carrier. If Michigan workers' comp benefits are disputed or a return to work is expected soon, the application for advance payment will likely be denied. Some reasons to ask for advance payment are to fix a car so you can look for work or to start a business that has a reasonable chance of success.
Know the risks and high interest rate
In Michigan, the employer or workers' comp insurance company can demand interest at a rate of 10% on an advance payment. This is a holdback from years past and does not reflect competitive interest rates. A person may be better off with a traditional loan from a bank. The insurance company may also think a person is desperate or hiding some fact just for asking. This could start a claims investigation with insurance doctor exams and even covert surveillance of activities.
Because of these potential consequences, requesting an upfront disbursement should never be done casually or without legal guidance. What may seem like a short‑term financial solution can trigger increased scrutiny of the claim, delay benefits, or reduce the injured employee’s overall recovery. Before pursuing an upfront disbursement, it is critical to understand how the request may be perceived by the insurance carrier and whether safer alternatives—such as negotiating a settlement or securing outside financing—would better protect both the claim and long‑term financial interests.
Don't rush into anything without a review of your claim
Wait until you can speak with an experienced Michigan workers' comp lawyer before filing for an advance payment on your own. It is possible to negotiate a lump sum settlement that could result in a much greater recovery. Attorney fees are capped at just 15% of the total amount when benefits are currently being paid and easily made up by higher settlement amounts.
By waiting to consult with an experienced attorney, you give yourself the best chance to fully understand your options and maximize your benefits. An attorney can help evaluate the strength of your claim, identify all available compensation, and negotiate with the insurance company on your behalf. In many cases, taking the time to pursue a negotiated settlement—not rushing into an upfront disbursement—can result in significantly higher compensation while keeping your out-of-pocket costs, including attorney fees, well under control.
Injured on the job? Call our attorneys now for a free consultation!
If you are injured on the job in Michigan and are wondering about advance payment options and how it works for your workers' comp, call now (855) 221-2667 to speak with an experienced attorney, or fill out our contact form for a free consultation. There is absolutely no cost or obligation.
Our attorneys have been exclusively helping injured workers in the Great Lakes State for more than 40 years. Our attorneys can help you better understand our state's workplace 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.
Our law firm never charges a fee to evaluate a potential case. Our law firm has represented injured and disabled workers exclusively for more than 40 years. Call (855) 221-2667 for a free consultation today.
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