April 7, 2020
Retirement presumption can affect workers’ comp benefits
By Jessica Stoeckman, Esq.
When injured workers receiving permanent total disability (PTD) benefits advance to retirement age, the impact on their benefits differs by state.
For example, in Wisconsin and South Dakota, PTD benefits are owed for life. In Iowa and Nebraska, PTD benefits are owed as long as the individual remains disabled.
In Minnesota, depending on the date of injury, an employee receiving PTD benefits under the Minnesota Workers’ Compensation Act will either have benefits for life, will be presumed retired at the age of 67 or 72, or will be eligible for only five years of PTD benefits.
Injuries prior to October 1, 1995
For injuries prior to this date, Minnesota Statute 176 did not provide a presumption of retirement, hence, employees were eligible for lifetime PTD benefits.
Injuries from October 1, 1995 to September 30, 2018
On October 1, 1995, Minnesota Statute 176.101, subdivision 4 was revised to include a presumption of retirement at the age of 67. This presumption is rebuttable, or in other words, the employee could dispute this presumption based upon the employee’s testimony and the totality of the circumstances surrounding retirement.
Factors to be considered include:
- The employee’s expressed intent to retire or continue working;
- Whether an application for Social Security benefits was made;
- Evidence of financial need for employment income and the adequacy of retirement income;
- Whether the employee had initiated discussion of retirement;
- Whether the employee engaged in or sought vocational rehabilitation; and
- Whether the employee was working after age of presumption.
Davidson v. Thermo King, 64 W.C.D. 380 (W.C.C.A. 2004).
If it was clearly established that an employee that was injured beyond the age of 67 had rebutted the presumption of retirement, that employee could receive PTD benefits through his or her lifetime.
Injuries after October 1, 2018
Due to the trend of employees working later in life, for injuries occurring after October 1, 2018, the presumption of retirement was pushed to age 72.
Additionally, the updated legislation provides a cap of five years if an employee was injured after the age of 67. In other words, if an employee was injured at the age of 69 and deemed permanently and totally disabled, that employee could receive PTD benefits from the age 69 through 74, rather than the potential lifetime of benefits under the earlier legislation.
Tip for employers: Document employees' references to retirement
If any statement is made by an employee about intent to retire, make a note of the statement for future reference. Employers also should document the circumstances of any retirement discussions, such as who raised the issue and whether the employee approached the employer.
This is not intended to serve as legal advice for individual fact-specific legal cases or as a legal basis for your employment practices.