Off Work on Workers’ Comp and Thinking of Retiring? THINK AGAIN!

From time to time, we see the situation where an employee with many years at their job decides to retire following a serious injury but before they have concluded their workers’ compensation claim.  Normally, they reason that since they will not be able to return to their job due to their injuries, they might as well go ahead and retire so they can receive their retirement benefits.  Unfortunately, what seems like a common sense decision can be a very costly mistake.

Under the law, a injured worker that is unable to return to any type of work, or is only able to return to restricted work at lower earnings, is entitled to compensation for their loss of earning capacity.  Work comp benefits may be due to them for either permanent and total disability or their decreased earning capacity due to the injury.  Retiring, however, seriously jeopardizes and most often destroys the worker’s right to these benefits.  In short, the law may view retirement as voluntarily removing themselves from the labor force, meaning they have no loss of future earnings to be compensated for.  Using retirement benefits, which the worker has already earned based on their many years of service to their employer, as a substitute for workers’ compensation benefits, designed to compensate them for their future loss of earnings, doesn’t make much sense when they are entitled to receive both.

Even when no employer provided retirement benefits are involved, claiming benefits for Social Security Retirement or Disability can still eliminate the workers’ rights to work comp benefits for future loss of earnings.  When an injured worker is put in a position where they are unable to return to their job and they are considering taking retirement or signing up for Social Security, they need to carefully consider their options.  Their family’s future is at stake and errors can be very costly.

Hanagan & McGovern is a Mt. Vernon, Illinois, workers’ compensation and personal injury law firm serving southern and central Illinois.  If you have questions concerning this article or have other workers compensation questions, please contact us.