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Study says work-comp lump-sum the way to go

The Workers Compensation Research Institute just released its findings from a worker's compensation study. Researchers wanted to find out if lump-sum settlements in cases with injured workers were beneficial or detrimental to the worker's career trajectory. According to the WCRI there has been some debate over the topic.

Some argue that getting a large amount of money all at once might deter employees from heading back to work because they do not have an immediate need for income. Others say that the settlements provide a sense of closure while opening new doors and pathways to a new career.

The WCRI followed more than 2,000 workers from Michigan who were injured on the job in 2004 and decided to take lump-sum settlements for their worker's compensation, rather than payment installments.

After four years, the WCRI found that 78 percent of those who took the immediate settlement did not change their employment status. Of those who did change their employment status, 30 percent were employed at the time of the lump-sum and 19 percent were not.

Overall, most of the 2,000 workers went back to work after receiving their lump-sum settlement. The only exception was older employees who experienced a downturn in their employment after the settlement.

The WCRI hopes the lessons learned from the workers in Michigan will emanate throughout the country. By finding out whether or not workers use the lump-sum settlement as a way to help them get back to work or close a chapter in their life, researchers hope lawmakers and other stakeholders respond with a more positive outlook on lump-sum worker's compensation settlements.

Source: Business Insurance, "Lump-sum settlements encourage injured employees to return to work: WCRI", Roberto Ceniceros, July 11, 2012

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