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New Study Shows Lump Sums Encourage Workers to Return to Work

The Workers’ Compensation Research Institute (WCRI) has recently done a study of 2,138 workers who were injured to see if receiving a lump sum encouraged them to return to work, or encouraged them to prolong their absence from employment. This study disproved many of the cynics who believed that lump sum settlements discourage injured workers from returning to work.

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Previously, some experts have expressed concern that receiving a sizable lump sum will deter people onworkers’ compensation from returning to work because workers may feel a less immediate need for income. Others believe that the lump sum settlement encourages workers to return to work because they feel a sense of closure, which will motivate them to move on with their lives and return to their careers.

Author and public policy analyst at WCRI, Bogdan Savych, said, “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. My hope is this research will help policymakers and other stakeholders understand how workers respond to receiving a lump-sum settlement.”

The study concluded that seventy-eight percent of the injured workers who received a lump sum settlement did not change their employment status, which means that a majority of he people who were employed at the time of settlement continued to work and those who were not employed remained unemployed.

Thirty percent of the injured workers that did change their employment status left work when they were previously employed before the lump sum settlement. Nineteen percent of those who were not employed prior to the lump sum settlement chose to move on and continue their career.

On average, more injured workers on workers compensation returned to work after receiving a lump sum settlement. Average employment increased from twenty five percent of workers at the time of the settlement to thirty two percent after one year from the date of the settlement. The exception to the study was the older workers, who showed a decline in employment after their lump sum settlement.

Pulgini & Norton, LLP attorneys have handled workers’ compensation claims for over 25 years in and around Boston and its surrounding areas. If you or a family member has been injured at work and would like to seek legal assistance, please contact us at (781) 843-2200 or (888) 344-2046 or email us.

Cited Sources:

Lump Sums Assist Rather than Discourage Return to Work, Says New WCRI Study, Midland Daily News, July 11, 2012

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