Lump Sum Settlements Encourage Return to Work: Study

Lump sum settlements in workers’ compensation claims encourage injured workers to return to work, according to a new study by the Workers Compensation Research Institute’s (WCRI).

The study, Return to Work After a Lump-Sum Settlement, looked at whether lump sum settlements help or hurt return to work for injured workers. Although some believe that settlements discourage return to work, the study shows the opposite is true.

The study examines the experience of 2,138 workers who were injured in Michigan in 2004 and later received a lump-sum settlement. WCRI followed the employment experience of these workers between 2004 and 2008.

Among the study’s many findings are:

“This is an important study because we need to find out whether settlements discourage return to work for injured workers who want to return to work or assist them in closing this chapter of their life and moving on with their career,” says Bogdan Savych, author and public policy analyst at WCRI. “My hope is this research will help policymakers and other stakeholders understand how workers respond to receiving a lump sum settlement.”

Although the study focuses on injured workers in Michigan, Savych said policymakers from across the country can learn from these findings and better understand a worker’s decision to return to work after a lump-sum settlement.

Source: WCRI