Lump sum payments are exactly what they sound like - the payment of a workers compensation award all at one time. The common types of lump sum payments for workers compensation settlements are commutation, compromise and release, and permanent disability advance. These lump sum payment options become available after a doctor classifies the work injury as permanent and stationary, a term used to describe the injury as unlikely to improve.
Commutation Lump Sum Payment
Commutation is a judicial order stipulating a lump sum payment for all or part of a permanent disability award. A commutation lump sum payment can be requested through a petition to the court and requires proof of financial hardship.
Compromise and Release
Compromise and release, or C&R, is a settlement where future medical care responsibility is transferred to the injured worker. After disbursement of a lump sum payment as the result of a C&R action, medical bills will no longer be paid by the insurance company. After a C&R payment is issued, the workers compensation case is considered closed.
Permanent Disability Advance
A permanent disability advance, or PDA, is a voluntary lump sum payment of permanent disability benefits that would have otherwise been due in the future.
Lump sum payments may not be the best option for everyone. Be sure to discuss all available options with one of our attorneys.