Well, it seemed like a good idea at the time.
It was 1945, WWII had been won, and our soldiers were returning home—many with crippling, permanent disabilities (PD). Out of this history sprang California’s Subsequent Injuries Benefits Trust Fund (SIBTF). 1
I. WHY DO WE NEED A SIBTF?
The SIBTF is administered by the Division of Workers’ Compensation, and covers the gap in PD compensation when a work injury increases an employee’s overall prior disability from a prior, older injury. For instance, the prior injury could range from a previous work injury, or nonindustrial injuries such as an auto accident, a disease, or even a birth defect.
This allows the employer to avoid being penalized with a higher PD award caused by the combination of the old disability that the employer did not cause, and the new disabilities. Thus, this program encourages employers to hire and keep employees with disabilities by preventing the employer from bearing the sole financial burden when a new workplace injury combines with a prior disability.
It is also important for injured workers because it provides them with additional lifetime compensation beyond what workers’ compensation would cover alone.
Example: A soldier returns from WWII with a back injury equating to 50% PD. They then suffer a 40% PD injury at work. If combined using the Combination Values Chart (CVC) found in the 2005 and 2013 California Permanent Disability Schedule and the AMA Guides 3 , this gives rise to a 70% PD plus a life pension. If it were not for the SIBTF, either:
- The employer would unfairly be responsible for a 70% PD+ despite having caused only a 40% PD injury, or
- The employee would only receive a 40% PD award despite suffering a significantly worse disability.
I never was too good at math, but in order to get SIBTF benefits, one needs to satisfy these two criteria:
- “70% PD Threshold Rule”: The original disability and new PD must combine to equate to 70% or higher, and the
- “Threshold Rule” (need either “a” or “b”):
- “35% Rule”: New injury rates at least 35% PD, OR
- Opposite & Corresponding Rule”: If first disability involved a hand, arm, foot, leg, or eye, and the new PD impacts the opposite one, the new injury only needs to be rated 5%. Think of Kite’s “synergistic effect” theory or furthered in Todd (Below).
II. CAUSES OF FINANCIAL WOES
Many factors combine to help dramatically increase the chances that an injured worker will qualify for SIBTF benefits, thereby driving up the SIBTF’s costs. Let’s explore those a little more.
Doctor Shopping
The employee typically relies on a QME hand-picked by the employee or their attorney to do the injured worker’s bidding. Unlike garden-variety workers’ compensation cases that try to utilize “neutral” doctors by requiring the parties to select a physician from a QME panel or consent to an Agreed Medical Examiner (AME), the SIBTF allows applicants to use their own experts, thus inflating PD ratings specifically designed to trigger SIBTF payouts.
Statute of Limitations
Also working against the SIBTF is the statute of limitations (SOL). In fact, there is no SOL as one would normally interpret the term. The injured worker needs merely to file within a “reasonable time” after they know or should reasonably know they have a probable SIBTF claim.
Remember our two criteria listed above? In order to “reasonably know” one has a probable SIBTF claim, one would have to realize that the WCAB’s formal PD findings met those thresholds (e.g., the subsequent injury rating at 35% or more and the combined disability –assessed via addition–being 70% or more). 2
Looser Eligibility
Although originally for serious pre-existing conditions (like a missing limb from war), the SIBTF is now frequently used for common age-related issues (e.g., high blood pressure, arthritis, sleep apnea) that, when added/combined with a work injury, push to or over the 70% PD line.
Problematic Case Law
Todd v. SIBTF, 85 Cal. Comp. Cases 576 (2020) (en banc) changed the “math” for calculating disabilities. Much akin to Athens Administrators v. WCAB (Kite) (2013) 78 CCC 213 (writ denied) and Vigil v. County of Kern (2024) 89 Cal. Comp. Cases 686i Todd provides that, if the physician can demonstrate the disabilities affected by separate injuries do not overlap, or that overlap intensifies the overall impact, the PD can be added rather than using the CVT’s more conservative combination methodology. This makes it easier to fulfill the “70% PD Threshold Rule.”
III. IS THE SIBTF PIGGYBANK REALLY IN TROUBLE?
Given all the advantages held by injured workers, it may come as no surprise that the SIBTF is facing a major solvency crisis. Costs are exploding. Given the ugly past, present, and future numbers outlined below, the business community, legislature, and administration are highly-concerned.
For instance, a comprehensive 2024 RAND report stated that the SIBTF is paying out significantly more than it was ever designed to and payments have grown exponentially:
- 2010 Payouts: $13.6 million
- 2022 Payouts: $232 million
- Projected Liability: The SIBTF currently owes between $7.9 billion and $10.5 billion in future payments for claims that are already filed or pending.
Who Cares? You Do!
The SIBTF is not funded by general taxes but rather a surcharge on California employers. Because the SIBTF is bleeding money, California has drastically-raised this tax:
- 2015 Assessment: Employers paid approximately $14 million.
- 2025 Assessment: Employers projected to pay over $850 million (6,000% increase).
- Future Projection: Without reform, this tax is expected to hit $1.5 billion by 2030.
IV. WHAT NOW?
In 2025, the Legislature passed Assembly Bill 1329 in an attempt to “fix” the SIBTF. However, Gov. Newsom vetoed it.
In his veto message, Newsom argued the bill didn’t go far enough, called the current system “unsustainable,” and demanded a “comprehensive reform” proposal be ready for the January 2026 budget. 1
One can expect major changes to the SIBTF in 2026. These will likely include stricter rules on what counts as a “pre-existing disability,” and requiring SIBTF cases to use neutral QME doctors instead of hired experts. Other possible changes include creating a firm SOL and reversing Todd.
V. CONCLUSION
2026 promises to be an active legislative year in California, possible with regards to workers’ compensation in general, but most certainly with regards to the SIBTF in particular. Keep your eyes glued to future editions of the B&B Blog in which our editor-in-chief, John Kamin, will keep us updated on the latest legislative action as it occurs, blow-by-blow.
1 The term “Subsequent Injury” is confusing. The Subsequent Injury must be an industrial injury whereas the “Pre-existing disability” can be either industrial or non-industrial.
2 Subsequent Injuries Fund v. WCAB (Pullum) (1970) 2 Cal. 3d 78
3 To determine whether the PD is added or combined, see Todd v. SIBTF, (2020) 85 Cal. Comp. Cases 576 (Appeals Board en banc) (Above)
4 The SOL and other problems for the Fund were to be improved upon via legislation (AB 1329) in 2025. Governor Newsom issued a veto because he believed the proposed statutory change did not go far enough in decreasing SIBTF liability and, in fact, might actually increase SIBTF costs. The language that caused this concern stated that, for injuries occurring on or after January 1, 2026, eligibility for benefits required “substantial evidence” that the prior PD resulted in loss of earnings, interfered with work activities, “or otherwise impacted the ability of the employee to perform work activities or activities of daily living” (ADLs). The SIBTF was originally intended to compensate for the combined effect of work-related injuries and a pre-existing condition that impacted the ability to work, not necessarily general life activities. See “Governor Promises Major SIBTF Reforms in 2026,” Nov 3, 2025 B&B BLOG, John Kamin.
Don R. Barthel is one of the founding partners of Bradford and Barthel, and is based in the firm’s Sacramento office. He has taken thousands of doctor depositions and is an expert on the AMA Guides to the Evaluation of Permanent Impairment. If you have any questions about workers’ compensation defense issues, please feel free to contact him at 818.654.0411 or via email at dbarthel@bradfordbarthel.com.
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