Commutation of Benefits

What is a “commutation”? Simply stated, a ‘commutation’ is the legal term for a petitioner asking the Court to accelerate the payment of an award to answer some pressing need of the claimant.

Commutation reduces exposure in two ways:

1)Any commuted payment made is discounted 5%. Therefore, payments of compensation which are made under Order For Commutation saved the insured money.
2)The payment of commutation is deemed to shorten the period of overall benefits. A claimant, under the New Jersey Workers’ Compensation Act, has two years to re-open a claim from the time last payment was paid. By commuting payments, the period for re-opener is shortened.

Generally speaking, a respondent does not usually object to paying a commuted award.

A recent case, Piskorz v. Beno Stucco Systems Corp., discussed the availability of commutation in a specific case. The Petitioner filed a motion for commutation of his workers’ compensation award, stating he wanted to leave America and open a business in Poland. According to the petitioner, he needed his money NOW because he had obtained the promise of a financial subsidy from the European Regional Development Fund for $60,000.00 to open the business, however, as a condition of the approval, he had to provide his own matching personal funds of $60,000, otherwise he will not receive the subsidy.

The Judge of Compensation inquired as to whether the petitioner (1) had the matching funds, or (2) had any experience running a business. The petitioner could not verify that even with the grant of a commutation e would have the funds necessary to get a matching grant and had no experience running a business.

The Judge of Compensation denied the motion because the petitioner failed to prove: (1) he planned to actually remove from the U.S., and (2) his particular circumstances warranted a departure from the usual method paying a workers’ compensation award.

Case: Piskorz v. Beno Stucco Systems Corp., 06-6559 decided August 15, 2008 by the Honorable Philip A. Tornetta, J.W.C. (Note: this blog entry discusses an agency decision which is not binding law).

Statute discussed: N.J.S.A. 34:15-25

Contributed By: Greg Lois

Greg Lois is the managing partner of LOIS LLC and dedicates his practice to defending employers and carriers in New York and New Jersey workers' compensation claims. Greg is the author of a popular series of "Handbooks" on workers' compensation, and is the co-author of the 2016 & 2017 Lexis-Nexis New Jersey Workers' Compensation Practice Guide. Greg can be reached at 201-880-7213 or glois@loisllc.com