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CREDIT FOR OVERPAYMENTS & THIRD PARTY CASES

In general, there is a public policy against receiving double recoveries. If benefits are paid by a governmental entity, credits or offsets may apply.

The Workers' Compensation Appeals Board decides when and how much credit the employer is allowed.

In third party cases the Board has power under Labor Code §3861 to "allow, as a credit to the employer to be applied against his liability for compensation, such amount of any recovery by the employee for his injury, either by settlement or after judgment, as has not theretofore been applied to the payment of expenses or attorneys' fees, pursuant to the provisions of Sections 3856, 3858, and 3860 of this code, or has not been applied to reimburse the employer."

Credit for alleged overpayment of temporary disability may be allowed, depending on the facts, but it is up to the Workers' Compensation Appeals Board. When the enployer fails to object under Labor Code §4062 to a medical determination or fails to timely serve a report finding the injured worker to be permanent and stationary, the Board may deny a credit for overpayment of TD. See J.C. Penney v. WCAB (Edwards) (2009) 175 CA4th 818  and Maples v. WCAB (1980) 111 Cal.App.3d 827.

Unilateral taking of credit by the adjuster can result in penalties and/or sanctions under Labor Code §§5814 and 5813. See Rohrback v. WCAB (1983) 144 Cal.App.3d 896, where the Court imposed a penalty for the unilateral credit and suggested 3 methods the employer could have used to protect what it viewed as an overpayment.

Credit for permanent disability advances is routine: the worker does not get paid twice for the same benefit.

Subsequent injuries
are subject to reduction: see Labor Code §4753.

There are offsets for some collateral benefits, such as Social Security Disability and State Disability (SDI)

See, too, Liens

Label Item Links Comments
Labor Code See above  
Regulations/Rules  
Cases See above  
Forms      
Websites    
Practice Tips     
Articles
     
Magazine Articles Credit in Third-Party Cases: How to Coordinate the Civil and WC Cases: Interview with James G. Butler, Esq. Butler on credit
 
Roundtable    
Miscellaneous      

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