What do you need to know about settling your workers’ compensation case in Michigan?
We think settlement is an attractive option for many people on workers’ compensation. It gives them a fresh start and the insurance company will stop looking over their shoulder.
Individuals who settle workers’ compensation can seek medical treatment or vocation rehabilitation on their own terms. Some people just want to cash out and find a new job.
Thinking about settlement can be stressful. Here are some common questions and answers that can help you make an informed decision.
1. What is the average workers’ compensation settlement in Michigan?
Historical settlement data published by the WCA covers the time period from 1992 until 2015. The average settlement amount in 2015 was $59,209.41.
2. How are workers’ compensation settlements calculated?
Insurance companies view settlements as any other business decision. Does it make financial sense for the claim to be resolved with a lump sum cash payment? Settlements are based upon lost wages and medical treatment that could be owed in the future. A good workers’ compensation lawyer can help you maximize the amount paid.
3. Does settlement affect Social Security Disability Insurance (SSDI)?
Individuals on both workers’ compensation and SSDI are subject to an offset if combined benefits exceed 80% of average current earnings. It is possible to increase SSDI payments by settling a workers’ compensation claim and allocating this money over life expectancy. This generally eliminates any offset and puts more money in your pocket.
4. How much can a lawyer charge for a settlement?
Expect to pay 10% of your settlement if workers’ compensation benefits are being paid and no Application for Mediation or Hearing has been filed. This amount increases to 15% of the first $25,000.00 and 10% on the remainder if a case has been started.
5. Do you have to pay taxes on a workers’ compensation settlement?
Payments under workers’ compensation are income tax free. This includes lump sum cash settlements.
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 (855) 221-2667 for a free consultation today.
Photo courtesy of Creative Commons, by 401(K) 2013.