Basic (09-08)

DI 52120.100 Kentucky Workers’ Compensation (WC)

Kentucky WC awards rarely pay out as outlined in the agreement. Therefore, it is almost always necessary to verify the actual payments paid. An award may stipulate weekly payments then be issued in whole or in part as a Lump Sum. Also, see in this section DI 52120.100F concerning crediting of attorney fees.

A. Types of Kentucky WC payments and payment provisions

1. Temporary Total (TT) and Permanent Total (PT) benefits

TT and PT benefits pay 2/3 of the worker’s average weekly wage. The payments will be paid for the duration of the disability and are subject to minimum and maximum rates.

2. Permanent Partial (PP) benefits

For injury dates of April 4, 1994 or later PP benefits are calculated based upon 2/3 of the worker’s average weekly wage. PP benefits will be paid for a maximum of 425 weeks for a disability rated less than 50 percent and a maximum of 520 weeks for a disability rated over 50 percent. For injuries prior to April 4, 1994 most PP benefits were paid for a maximum of 425 weeks. NOTE: A PP benefit is often referred to as an “impairment” benefit because of its relationship to the impairment rating. For State maximum rates, see DI 52150.045.

3. Reopenings

Multiple awards can be paid on a Kentucky WC claim.  Most of the awards do not stipulate that they are final.  The claimant can request to have the case reopened.  They can only be reopened for fraud, error or due to an improved condition.  After 4 years there are no reopenings.  All claims reopened after 12/12/96 will be subject to new benefit determination procedures including assignment to an arbitrator.  Any increase in benefits are payable from the date of filing for the motion to reopen.  The CA/CTE/CR may need to contact the WC attorney to obtain the date of the request for reopening.

B. Retraining Incentive Benefits (RIB)

Retraining Incentive Benefits (RIB) provide payments for occupational pneumoconiosis (Black Lung Disease). These benefits are offsettable. They can be paid weekly or twice a month. They can also be paid as a lump sum (LS).

1. Last exposure on or after 12/12/1996

Miners can file claims while working, but they may not receive benefits until they stop working. Benefits are paid equally by the employer and the State Coal Workers Pneumoconiosis Fund.

Payment begins when the employee enrolls and participates in an approved vocational training program on a full-time basis (attending classes for a minimum of 12 hours per week). Payments are paid at a rate of 66 2/3 percent of the employee’s average weekly wage, not to exceed 75 percent of the State average weekly wage. Benefits are paid for a maximum of 104 weeks.

Most awards will State the benefits will begin the 2nd pay period following approval of the award. If unable to obtain the exact beginning date of the payments, use 14 days from the date the award was signed.

Payments for part time students (taking from 6 to 11 credits per semester) are 33 1/3 percent of the individual’s average weekly wage not to exceed 75 percent of the State average weekly wage and are payable over 208 weeks.

GED Students can receive 66 2/3 percent of their average weekly wage not to exceed 75 percent of the State average weekly wage for 17 weeks in addition to the 104 weeks.

Individuals who are 57 or older as of the date of last exposure can receive 66 2/3 percent of their average weekly wage not to exceed 75 percent of the State average weekly wage multiplied by a 25 percent impairment rating for 425 weeks or up to age 65, whichever is earlier.

2. Last exposure prior to 12/12/1996

The benefit rate is equal to 50 percent of the PP rate payable over 208 weeks.

C. Lump Sum (LS) Payments

1. Appeals

Any party may file for reconsideration of a lump sum award within 14 days. If no reconsideration is filed, the award is final and binding unless it is appealed to the circuit court. The only other basis for change after that time is for fraud, mistake, new evidence, or change of condition.

2. Computing the offset

Kentucky WC will often make an award based upon a given number of weeks and then convert the award to a LS by discounting that number of weeks. (i.e., In 2008, if an award for periodic payments is awarded for 425 weeks, it will be converted to an LS award by using a calculation that uses 359.0785 weeks rather than 425. See examples below and links for yearly discount tables).

The dollar amount that is multiplied by the number of weeks is always the weekly WC rate that will be used for prorating the LS settlement for SSA purposes. The computation formula may contain additional multipliers before arriving at a weekly amount. However, the multipliers are not important. Extract the dollar amount that is multiplied by the number of weeks.

Example 1:

The W/E is awarded a lump-sum settlement of $5000 based on a permanent disability of 3 percent.

The lump-sum award included $278.60 for waiver of right to vocational rehabilitation, and $2000 for waiver of right to reopen.

The individual received weekly temporary total disability of $332.02.

The settlement computation formula is shown as follows: $332.02 x .03 x0.75 = $7.47 x 364.3106 (number of weeks) = $2721.40.

Total settlement is $2721.40 + $2000 + $278.60 = $5000. When prorating the $5000 settlement, use the weekly rate of $7.47.

NOTE: The “0.75” is of no importance. It is not necessary to determine what the figure represents. Extract $7.47 that is multiplied by the number of weeks 364.3106.

Example 2:

The W/E is awarded a $21,237.11 lump-sum settlement based on 15 percent permanent disability. No periodic payments were made.

The “Settlement Computation” is shown as follows: “$220.54 x 15 percent x 1.25 x 1.5 x 342.3683 = $21,237.11”

When prorating this settlement, use the weekly rate of $62.03 ($220.54 x .15 = 33.08 x 1.25 = 41.35 x 1.5 = $62.03.

NOTE: Similar to Example 1, the “1.25” and “1.5” multipliers used by Kentucky in the calculation are not important and it is not necessary to verify what they represent. The formula “$220.54 x 15 percent x 1.25 x 1.5” is equal to $62.03, which is multiplied by the number of weeks, and is the figure we need to extract from the computation.

D. Settlements involving the Division of Workers’ Compensation Funds

Awards may stipulate that payments will be made by both the employer and the Kentucky Division of Workers’ Compensation Funds (formerly the Division of Special Fund) . The settlement will typically state that the employer and the WC fund make payments concurrently for a specified number of weeks. In practice, the employer will pay both weekly shares for half of the weeks then the WC fund will pay both shares for the remaining weeks in the settlement.

Example:

The award stipulates that the employer (carrier) is to pay a weekly payment for 425 weeks, and the WC fund is to pay a weekly payment for 425 weeks. They will both have the same beginning date. 

The award then states the employer is to pay their share first and the WC fund is to pay when the employer (carrier) stops. 

The employer pays their share plus the WC fund’s share for 212.5 weeks and then Special Fund pays both shares for 212.5 weeks.

NOTE: It is necessary to verify the actual payments made, as a, SSA-1709 completed by the carrier may only show the weekly rate that the carrier is responsible for.

When an award stipulates weekly payments, both employer and the WC fund may opt to pay out as an LS or decide for one to pay their share in an LS and the other in weekly payments. 

When an award is received stating the claimant is awarded a different amount that goes back to the offset effective date, the award will state the employer will take credit for benefits already paid.  SSA will offset based on the stipulated amount because the employer will do the adjustment.  SSA must offset and credit attorney fees accordingly.  

E. Cost-of-living Adjustments (COLA)

Kentucky WC pays out at the original amount for the duration of the award. There are no provisions for a cost of living increase.

F. Attorney fees

Credit expenses over the period specified in the award, even if it is after age 62 or 65.

1. Maximum fee

For contracts made on or after 07/14/ 2000 there is a maximum fee that an attorney may charge. Based upon the total award attorneys are permitted to charge up to 20 percent on the first $25,000, 15 percent on the next $10,000, and 5 percent of the balance up to a maximum of $12,000 in total fees.

2. Fee payment

If an attorney is involved, the claimant decides how the attorney will be paid and how the attorney fee is recouped.  Therefore, determine the following:

  • if the fee was recouped from a lump sum,

  • if the weekly benefits were reduced, or

  • if the weekly benefits were stopped.

G. Retirement insurance benefits (RIB) considerations

Kentucky WC does not offset due to the receipt of RIB.

H. Verifying WC

Follow verification procedures in POMS subchapter DI 52145.001F.3. If the Kentucky Division of Workers’ Compensation Funds (formerly the Special Fund) is involved, fax a request to them (see link to this Fund under DI 52120.100I. References, below). The fax number is located on their website and there is no charge for records. If the Kentucky Department of Workers’ Claims is involved, there is a charge of up to $.50 per page for documents. Develop through the servicing field office. (There is no longer an agreement between field office #441 in Frankfort, Kentucky, and the Kentucky Department of Workers’ Claims to obtain WC verification free of charge.)

I. References


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/0452120100
DI 52120.100 - Kentucky Workers’ Compensation (WC) - 03/23/2012
Batch run: 06/23/2023
Rev:03/23/2012