DI 52120: State Specific Workers' Compensation (WC) Procedures
New Jersey is a reverse offset State for some types of WC. All reverse offset ends at age 62.
A. Types of WC payments
New Jersey WC law is in Title 34, Chapter 15 of the New Jersey Revised Statutes (R.S. 34:15-1 to R.S. 34:15-142). All periodic WC in NJ is subject to State minimum and maximum amounts.
1. Temporary Total (TT) [34:15-12a]
TT WC is offsettable against SSA benefits. Reverse offset does not apply.
Amount - TT payments are equal to 70 percent of the worker’s average weekly wage. No COLAs are paid on TT.
When Paid - TT is paid while the worker is under active medical care and while not able to return to work.
Limits - TT cannot exceed 400 weeks. When TT ends, the worker may be entitled to receive benefits for permanent total or partial disability.
NOTE: Do not confuse TT WC with Temporary Disability Income (TDI) benefits, which are a State PDB benefit. For information on NJ TDI benefits, see DI 52135.165.
2. Permanent Total (PT) [34:15-12b]
PT WC is NOT offsettable against SSA benefits before age 62. Reverse offset applies.
PT is presumed when the worker has lost two major members or a combination of members of the body such as eyes, arms, hands, legs or feet. However, permanent total disability can also result from a combination of injuries that render the worker unemployable. It is initially awarded for a period of 450 weeks. PT can then continue beyond the initial 450 weeks if the worker is still unable to earn wages at his pre-injury level. Although those additional WC payments may be reduced to as little as $5 per week by wages earned after the 450 week period, they are still considered permanent total WC and so are NOT offsettable.
3. Permanent Partial (PP) [34:15-12c]
PP WC is offsettable against SSA benefits. Reverse offset does not apply.
PP is paid when the worker is permanently injured but able to return to work. These WC payments are also referred to as Scheduled Awards because the WC awarded is based on a percentage of certain "scheduled" or "non-scheduled" losses, as defined by NJ law (scheduled losses are for certain body parts, such as an arm or leg). While there is no specific statute for disfigurement benefits, awards can be made for permanent disability based upon the extent of disfigurement.
Amount - PP is based on 70 percent of the worker’s average weekly wage and paid in accordance with the statutory schedule. The minimum amount is $35 per week. No COLAs are paid on PP.
When Paid - PP is paid in addition to TT benefits and is due after TT ends. It is NOT reduced because of receipt of TT benefits.
Limits - The maximum period for an unscheduled injury is 600 weeks. Other injuries are paid as determined by the statutory schedule.
4. Second Injury Fund [34:15-95]
Second injury fund (SIF) payments are NOT offsettable against SSA benefits before age 62. Reverse offset applies.
The Division of Workers’ Compensation administers the SIF. It only makes payments when the worker is totally and permanently disabled as a result of their last work-related injury in combination with a pre-existing disability.
When SIF payments start - Payments from the Fund commence at the conclusion of payments by the employer/carrier. The commencement date of Fund benefits is found on the last page of the Decision of Eligibility form.
How long SIF payments are paid - Payments can continue until the worker’s death, as long as he remains totally and permanently disabled.
SIF amounts - Fund benefits are in the same amount as the WC received from the employer/carrier.
5. Order Approving Settlement with Dismissal [34:15-20]
These lump sum settlements are offsettable against SSA benefits. Reverse offset does not apply.
This type of lump sum payment is a compromise settlement made to resolve disputed claims. No further WC will be paid for that injury.
6. Commuted Awards [34:15-25]
Periodic WC may be commuted, but only with the approval of the WC bureau.
The WC paid by a commuted award may or may not be offsettable, depending on the type of WC that was commuted.
B. Reverse offset considerations
1. Mid-month adjustments
When an injured worker receives PT or Second Injury Fund WC, the PT or SIF award will specify the date the worker’s permanent total disability began. Offset does not apply effective with that date because reverse jurisdiction (RJ) applies. If that is not the first day of the month, you must compute the amount of offsettable WC for that month and code it in ICF as a monthly rate. Do not include the non-offsettable amount of WC in the monthly rate for the month of change. Code WC/PDB ICF to show reverse jurisdiction beginning the following month, as only full months of RJ should be coded as RJ.
2. Age 62
RJ WC ends at age 62, and in that month NJ pays reduced (RJ) WC prior to the age 62 attainment date and full WC from the day of age 62 attainment on. The correct amount of WC to use for offset for the age 62 month is the total amount of WC paid for the FULL month, which includes the RJ WC due that month.
As offset is applicable for all types of WC from the worker’s attainment of age 62 until age 65, take the following steps:
Diary these cases for 4 months prior to age 62 since the system will not produce an age 62 alert, and
Develop for WC verification, proof of age (if necessary), and a possible RIB election.
NOTE: Effective December 19, 2015 or later, WC offset termination extends from age 65 to full retirement age (FRA). See 2015 amendment in DI 52101.005.
When imposing offset at age 62, remember that for periods of continuous WC, the computation of the ACE and TFB (and any protected increases) should be based on the first month that offset was imposed or considered.
If offset was imposed and then removed because of RJ, and then imposed again at age 62, the offset effective date is not changed at age 62. The original ACE and TFB (based on the current family configuration) are used.
If RJ applied for all months of disability entitlement prior to age 62, the month of attainment of age 62 is that first month of considering WC offset. The TFB is then based on the age 62 month, and there are no protected increases at age 62.
C. Cost-of-living Adjustments (COLA)
NOTE: Also referred to as Supplemental Benefits.
1980 amendments to the WC law made provisions for annual cost of living increases for some workers. Prior to these amendments, all WC payments remained fixed at the weekly benefit rate awarded. COLAs do not generally affect SSA payments because in order to receive a COLA, the worker:
Must be receiving PT or Second Injury Fund WC (which is RJ until age 62), AND
Must have a date of injury prior to 01/01/1980 (unless SSA has a different date of disability onset, our offset ends at age 62 for these cases).
D. Attorney fees
Counsel fees are limited to 20 percent of the WC received and are set by the judge assigned to the case. Workers are generally represented by an attorney but they may file a claim petition on their own (‘pro se’).
NOTE: When the attorney fee is deducted from periodic WC and paid directly to the attorney, generally we credit the excludable expense to the period of WC adjusted or withheld to recover the fee. If the fee is recovered from retroactive WC due, we credit it ‘up front’ (similar to a lump sum Method A credit). However, if the last weeks of the WC awarded are withheld to recover the fee, we credit it to the end of the awarded WC (similar to a lump sum Method C credit). This is an area where the technician must rely on their judgment to make a reasonable determination.
E. Retirement insurance benefit (RIB) considerations
NJ does not offset their WC for RIB.
F. Time limitations for filing claims
There is a 2 year statute of limitations that applies to workers' compensation cases. A formal claim petition must be filed within 2 years of the date of injury or the date of last payment of WC, whichever is later. In cases of occupational illness, such as asbestosis or hearing loss, the claim petition must be filed within 2 years from the date the worker first became aware of the condition and its relationship to employment.
G. Opt-Out statute
New Jersey’s WC system is technically elective. Employers are not required to provide WC insurance for their employees. However, few employers actually exercise their right to opt-out of the State WC system. The few companies that opt-out create their own plans to provide benefits to injured employees. Payments from those private plans are NOT WC, and we do not offset for them. The New York Regional Office (RO) maintains a list of the companies with these plans; check with the RO before determining payments are private plan payments and not WC. Email requests for this information to the NY Region Center for Disability at ||NY CD.
H. Verifying WC
Always ascertain the type of NJ WC being paid in order to determine whether reverse offset applies. PT WC and Second Injury Fund WC are NOT offsettable before age 62. All other NJ WC is offsettable. Verification of the type of WC being paid is REQUIRED before you can determine that offset does not apply.
1. Obtaining proof from the carrier
NJ maintains a list of insurance carrier contacts on their website. See DI 52120.165L below. The carriers are the best source of WC payment information.
2. Obtaining proof from the State
Form SSA-1709 is usually the best vehicle for obtaining WC information from the State, rather than asking for copies of documents. NJ WC document copies do not photocopy or fax well, therefore, if copies are needed DOL will mail the documentation to SSA. Faxes will no longer be used by DOL to forward information to the requestor at SSA.
To obtain WC information contact the State at:New Jersey Department of Labor and Workforce Development Division of Workers' Compensation
P.O. Box 381
Trenton, NJ 08625-0381
Phone: (609) 292-2515
Fax: (609) 984-3924
I. Disputed WC claims
In NJ, TT WC is often followed by the carrier’s voluntary offer of some permanent disability benefits. In cases of dispute between a worker and the employer/carrier over WC, the worker may file either an Application for an Informal Hearing or a formal Claim Petition with the Division of Workers' Compensation. The case will then be assigned to a judge to resolve the disputed claim. The suggestions made by the judge at an informal hearing are not binding on either party, but formal hearing decisions are binding. If the WC case is settled in court, it is usually for a higher dollar amount than the voluntary offer.
Orders approving WC will indicate the dollar amount to be paid over a specified number of weeks, less any voluntary payments made after the TT. Generally the worker will be issued a ‘catch-up’ payment starting from the end of the TT, and then regular WC payments will be made at the normal dollar amount as noted on the Order. However, see DI 52120.165A.5. above regarding 34:15-20 Orders (Orders Approving Settlement with Dismissal).
J. WC forms
Because NJ offsets their PT and Second Injury Fund payments for SSA disability benefits, we must provide information about SSA benefits to the State. The State form WC-124 (Request for Social Security Information) is sent to SSA for this purpose. We complete Part 2. For an exhibit of WC-124, see the first bullet in DI 52120.165K — Exhibits below. For WC forms and letters that contain payment information, see the second to last bullets in DI 52120.165K — Exhibits below.
DI 52101.005 Social Security Amendments with Workers’ Compensation/Public Disability Benefits (WC/PDB) Offset Provisions
Precedent Information: PR 02505.033, PR 01-033 (Impact of a Third Party Settlement Payment on the WC Offset Provision of the Social Security Act)
SSA Ruling 82-5 (Treatment of Certain Lump-Sum Settlements Made under New Jersey Law)