Permanent partial and permanent total disability benefits in New Jersey are considered to be wage replacement benefits, so they are paid in the same manner as wages, which is weekly. These benefits accrue from the date of the last payment of temporary disability benefits. In many cases, the entire award has not accrued at the time of the settlement hearing and the injured worker will receive payments weekly until the award has been paid in full. Once the award has been entered, the benefits are due and payable to the injured worker or his dependents should he die during the period of the payout.
In certain rare circumstances, an injured worker may petition the court requesting that all or some of the award be paid in a lump sum. This process is called a “commutation”. If the commutation is approved, the benefits are subject to a 5% discount. It is uncommon for this type of request to be granted. The standard for granting such a request is if it is in the best interest of the injured worker.
In a recent Appellate Division decision, Jenkins v. LA Fitness, Docket No. A-3570-12T2 (February 4, 2015), such a request was denied. In that case, the injured worker wanted to expand a food service business. However, after a hearing, the judge of compensation determined that an acceleration of payments was not in his best interest and denied his request. The Appellate court affirmed that the commutations are only allowed when it clearly appears that an unusual circumstance warrants a departure from the normal manner of payment. It is strictly prohibited that a payment would be made to satisfy a debt, or to make payment to physicians, lawyers or others.