TN 3 (07-23)

DI 52110.005 Vocational Rehabilitation (VR) Payments

VR payments are made in return for actual participation in a program designed to prepare the disabled individual to reenter the workforce. To qualify as VR payments, there must be a specific plan tailored to the individuals’ needs.

A. When to offset VR payments

1. Periodic VR payments in lieu of WC

Offset VR paid in lieu of WC.

EXAMPLE: The number holder (NH) received $400 in weekly temporary total (TT) WC payments. The NH’s health improved and they began to participate in a VR program. The WC carrier stopped the TT payments and started paying VR payments of $250 per week. Offset applies to the VR payments because they were paid in lieu of WC.

NOTE: In California, permanent disability advances (PDAs) may be paid in addition to VR. The VR payment is still offsettable because it is in lieu of actual WC payments despite the advances. See DI 52120.030 for information on California WC.

2. VR listed as a portion of lump sum (LS) settlement

Offset if the NH refuses VR or is not required by the employer or WC carrier to participate in a VR plan. Include the VR payments when computing the gross amount of the LS.

EXAMPLE:The settlement documents state $20,000 is set aside from a $100,000 LS for future VR, but there is no definite plan for the NH to attend VR and no obligation for them to attend. Process the case as a $100,000 LS. Annotate Remarks section that $20,000 was allegedly set aside for VR, but the NH is not participating or required to participate in a VR program according to the settlement. Alleged VR is offsettable.

B. When not to offset VR payments

Do not offset VR payments that are paid in addition to WC if the NH is participating or required to participate in a VR plan. This applies to both periodic WC payments and LS settlements.

NOTE: In the Interactive Computation Facility (ICF), show VR payments not subject to offset as special amounts deducted from the gross not as excludable expenses. If the payments are input as expenses, ICF will not compute the offset correctly. See DI 52165.000 - WC/PDB Computations through Interactive Computation Facility (ICF).

EXAMPLE 1: Periodic WC.

An injured worker receives weekly Temporary Partial (TP) WC of $275. The worker agrees to participate in a VR program. The carrier pays a VR payment of $75 in addition to the TP of $275 per week. Offset does not apply to the $75 VR payment because the worker is participating in a VR program and the VR payment is in addition to WC.

EXAMPLE 2: WC lump sum (LS).

NH receives a $100,000 WC LS. The compromise and release papers show $20,000 of the settlement is for VR. The FO/PC confirms the NH is participating in a VR plan. Process the case as a $100,000 LS and list the $20,000 VR payment in ICF as a special amount to deduct from gross. Annotate action in ICF Remarks section.

EXAMPLE 3: WC LS involves periodic VR payments.

The NH received a permanent partial (PP) WC rating and negotiated a LS settlement with a cash payment of $51,000 and periodic VR payments of $185 per week in return for participating in an approved VR program. The cash payment was prorated at the previous WC periodic payment rate of $365 per week and may cause offset.

Offset does not apply because the VR payments are in addition to the WC cash settlement. For ICF input, annotate in the Remarks section why the VR is not subject to offset. The $185 weekly VR is not part of the input.

C. Developing VR payments

Develop the existence of a specific VR plan. If the NH cannot provide proof of actual participation in a plan:

  1. 1. 

    Contact the WC carrier or the WC attorney for verification.

    NOTE: The WC attorney can assist in obtaining actual proof but oral or written statements from the attorney do not constitute proof of WC or proof of participation in a VR plan.

  2. 2. 

    Determine if VR payments are paid in addition to, or in lieu of WC.

  3. 3. 

    Verify the amount of any VR payments and related WC.

 


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0452110005
DI 52110.005 - Vocational Rehabilitation (VR) Payments - 07/05/2023
Batch run: 07/05/2023
Rev:07/05/2023