Many injured workers ask, “what happens if I retire while on workers comp?” there is a sense of urgency the moment an employer offers a retirement incentive to someone who has been out with a work injury. A buyout can look like a good option after months at home, with medical appointments filling the calendar and a paycheck that may already be reduced. Before you sign anything, it helps to know that in New York, retiring can put your workers’ compensation wage benefits at risk.
This post explains the general rule, how the Workers’ Compensation Board decides whether a retirement was voluntary, and what to gather and ask before you make a decision. It is general information and not legal advice for your situation.
Why a Retirement Offer Deserves a Second Look
Large employers and municipalities across Long Island, Suffolk County, Nassau County, and New York City sometimes offer early retirement incentives, and those offers will be presented to employees who are out of work due to a work-related injury. The offer usually comes with a deadline, and anyone weighing a decision like this has good reason to give it serious thought.
Workers’ compensation pays for your medical care and replaces part of the wages while you are unable to work.Health coverage, a pension, and household bills can all impact retirement decisions. Once you retire, the decision is very hard to take back and can have a significant impact on your workers compensation lost wage benefits. This is why the details matter before the deadline arrives.
The General Rule in New York
New York courts have held that a worker who voluntarily withdraws from the labor market by retiring is not entitled to workers’ compensation monetary benefits unless the work injury caused or contributed to the retirement. If the work injury caused or contributed to the retirement then the departure from the labor market is considered involuntary. The Appellate Division, Third Department, set forth the standard to determine whether retirement was voluntary in Matter of Lombardi v Brooklyn Union Gas Co. in 2003.In plain terms, the Workers’ Compensation Board (WCB) must determine why you retired. If your work injury is a contributing factor to your decision to retire you may still be eligible for work related wage replacement benefits. If you retired because you chose to leave the workforce and the injury played no part, the wCB can find that you withdrew voluntarily and suspend your wage replacement benefits. How the Board determines whether you voluntarily withdrew from the labor market can depend on where your claim stands, including whether you have been classified you with a permanent disability.
How the Board Decides Whether Retirement Was Voluntary v Involuntary
Whether retirement was voluntary or involuntary is a question of fact. The WCB looks at the medical evidence, your work restrictions, and your sworn testimony, along with what you did and said in the period before you retired. Courts generally leave the Board’s finding in place when evidence supports it, which makes the record you build before retirement especially important.
One Third Department decision from 2004 demonstrates the importance of medical and how the Board interprets the medical evidence.. The claimant’s own doctor recommended retirement because of back pain, but the Board instead credited an employer physician who found he could still perform light duty work, and the court upheld the finding that his retirement was voluntary.
Consider a 58-year-old municipal employee who hurt a shoulder lifting equipment and has been out of work for seven months. The employer offers a retirement incentive with a 30-day deadline. If the treating doctor has documented that the shoulder prevents a return to the full duty work, that record supports a link between the injury and the decision to involuntarily retire. However, if the record demonstrates the doctor cleared the employee for the job and the employee simply accepted the incentive, the Board would likely find the retirement voluntary, therefore entitlement to lost wage benefits would stop. This is an example to help understand the concept of voluntary v involuntary retirement so please be aware that if the facts are slightly different there could be a contrary outcome.
What Your Medical Records Can Show
Because the Board weighs medical evidence so heavily, the period of time before you decide to retire is extremely important. This is the time to make sure your medical records conform to your intentions. Talk with your treating doctor about your restrictions and whether the injury affects your ability to keep doing your job, and ask that the answer be written into your chart. Keep copies of work status reports, restriction notes, and treatment records, along with any letters from the employer or its insurance carrier about returning to work. Most physicians provide patients with a portal to review your records. This is a great way to keep yourself apprised.
If your doctor believes the injury is a reason you can’t continue to work, that opinion needs to be part of your medical record before the retirement date.
A Buyout Also Touches Your Pension, Health Coverage, and Other Claims
A retirement incentive is an offer from your employer, and it is separate from any settlement of your workers’ compensation case. Some retirement packages come with paperwork that asks you to release claims against the employer, and whether a particular document affects your workers’ comp case depends on its exact wording. Have an attorney read it first.
Retiring can also change your health coverage, your pension options, and your path to a disability pension or Social Security Disability benefits. Those decisions interact with your workers’ comp claim, so they are best made together and not separately. .
Questions to Ask Before You Sign
- Ask for the full agreement in writing, and find out exactly what you would be giving up, including whether it releases any claims and whether it mentions your workers’ comp case.
- Ask your treating doctor to state in writing whether your injury affects your ability to keep doing your job, and keep a copy for your own file.
- Ask the employer or plan administrator how retirement would change your pension, your health coverage, and your benefits, and find out whether the acceptance deadline can be extended.
How an Attorney Can Help
An experienced workers’ compensation attorney can read the retirement paperwork before you sign, review your medical records for gaps, and explain how retirement could impact your workers’ compensation benefits. If your injury resulted in filing an application for Social Security Disability, a disability pension, or a claim against a third party, it is advisable for an attorney to review all of those matters together to make sure you are maximizing your benefits. No attorney can promise an outcome, but you deserve to have all your potential claims evaluated together.
Get the Deadline in Writing, Then Get Your Answers
A retirement incentive while you are out of work and worried about money can result in making a pressured rash decision. Ask the employer for the deadline in writing so that you know what your time frame is to make a decision. Thereafter,gather your medical records, and talk to an attorney. If you are out of work due to a work injury and have received a retirement offer, Miller & Caggiano offers free consultations. Call 866-26-FIGHT or 516-506-7655 to talk through your options before you decide.