Don’t you just love it when, after waiting many months to get in to see a QME or AME (and after a review of all of the medical records and a thorough physical exam) the doctor states, “Oh, this person was P&S 8 months ago,” creating a significant TTD overpayment. The first question you likely find yourself asking is “Can I assert credit against PD?” Well, like most questions in workers’ compensation, the answer is “it depends.”
Whether an employer is to allowed a credit for over-payment of benefits is typically decided on a case-by-case basis. Labor Code §4909 provides that payments received which were “not then due and payable . . . may be taken into account by the appeals board in fixing the amount of the compensation to be paid.”
As noted in J.C. Penny Co. v. Workers’ Comp. Appeals Bd. (Edwards) (2009) 175 Cal.App.4th 818 [74 Cal.Comp.Cases 826], “The WCAB generally has some degree of discretion to grant or deny credit for over-payment under §4909.” The Appeals Board may allow a credit, for any payment, allowance, or benefit paid by the defendant employee when it was not then due and payable or when there was a dispute or question concerning the right to compensation. (Lab. Code §4909.) Allowance of a credit is within the Appeals Board’s discretion. (City and County of San Francisco v. Workmen’s Comp. Appeals Bd (Quinn) (1970) 2 Cal.3d 1001, 1016 [35 Cal.Comp.Cases 390, 395]; Herrera v. Workers’ Comp. Appeals Bd. (1969) 71 Cal.2d 254, 258 [34 Cal.Comp.Cases 382, 384].) In exercising its discretion, the Board will primarily examine whether there is any prejudice to the injured worker given the distinct purposes of the two different types of benefits (TD & PD). Award of an over-payment credit must be “weighed in the light of the circumstances of the particular case and should not be subjected to a harsh dictate that avoids the equities presented.” (Cordes v. General Dynamics-Astronautics (1966) 31 Cal.Comp.Cases 429.) Credits need not be allowed when over-payments result from inept administration of the claim. (Maples v. Workers’ Comp. Appeals Bd. (1980) 111 Cal.App.3d 827 [45 Cal.Comp.Cases 1106].) In other words, if you’re asleep at the wheel when it comes time to terminate TD, don’t be surprised if a judge disallows the credit.
The most significant factor the Board looks at is why was there an over-payment and whether that over-payment defeats the purposes of PD. PD, as we know, is for compensating the injured worker for the effects of the injury on future earning capacity. So, in practice, if the over-payment wipes out the award of PD, or a significant amount of it, the credit will likely be disallowed. When you have a large TD over-payment thanks to a retroactive MMI finding, you stand a better chance of getting the credit allowed so long as it does not have a significant impact on the injured worker’s PD award.
Louis A. Larres is a Senior Partner with Bradford & Barthel, LLP (Fresno). He can be reached at firstname.lastname@example.org.
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