O.A.C. 4123-3-37; Industrial Commission of Ohio (IC) Resolution R07-1-02
Chief of Operational Policy, Analytics and Compliance (Signature on File)
Management policies, directives and memos regarding lump sum advancement that
predate the effective date of this policy.
The purpose of this policy is to ensure that a
lump sum advancement (LSA) is determined and paid according to the applicable
laws and rules.
This policy applies to BWC Field Operations staff.
Lump Sum Advancement (LSA): Payment that is made to the injured worker (IW) or surviving spouse and
then deducted from future compensation awards of permanent total disability
(PTD), scheduled loss (SL), Percentage of Permanent Partial (%PP), or death
benefits for rendering the IW or surviving spouse financial relief or for the purpose of furthering the IW’s rehabilitation.
Lump Sum Advancement for Attorney Fees (LSA-AF): An LSA filed with and granted by the IC for payment
to be made directly to the attorney who represented the applicant(s) with regard to the receipt of the award that is to be
LSA Options Form: A
document sent by the Bureau of Workers’ Compensation (BWC) to the LSA applicant
that allows the applicant to select the weekly reduction and repayment period
for the LSA.
Net Present Value (NPV):
The present value of a sum of money in
contrast to the value it will have in the future.
Parties to the Claim:
For purposes of this policy, injured worker (IW), IW authorized representative,
dependent(s) in a death claim, authorized representative of dependent(s) in a death
claim, employer, employer authorized representative, and BWC.
Principal: For purposes
of this policy, the amount of money that is advanced to the applicant(s).
shall request an LSA on an Application for Payment of Lump Sum Advancement
(C-32). The C-32 must be fully completed and notarized.
applicant must submit evidence to support the need for financial relief or for
furthering the IW’s rehabilitation.
supporting financial relief must include the name(s) of the creditor(s) and the
amount(s) owed (e.g., an affidavit detailing this information).
establishing furtherance of the IW’s rehabilitation must include the name of
the facility providing the services and the amount that is owed or anticipated
to be owed (e.g., an affidavit detailing this information).
may grant an LSA to:
An IW who is currently receiving:
Permanent Total Disability (PTD);
A scheduled loss (SL) award; or
A Percentage of Permanent Partial (%PP) award; or
A surviving spouse who is currently receiving death benefits.
BWC will not grant an LSA to:
A surviving spouse receiving scheduled loss payments;
A dependent child(ren) receiving:
Scheduled loss payments; or
Death benefits; or
applicant requesting an LSA when allowance of the PTD, SL, or %PP award that is
to be advanced has been appealed to the IC or court.
policy prohibits BWC from granting an additional LSA in a claim when there are
already two LSAs granted on or after 12/1/2004 currently being recouped.
A subsequent LSA may be granted once a previously granted LSA has
Any LSA-AF is not considered to be one of the two LSAs granted by BWC.
BWC shall not grant an LSA when:
The total amount of all LSAs for death benefits exceeds the amount of death
benefits payable over a two-year period; or
The reduction to recoup the LSA reduces the original biweekly rate of compensation
by more than one-third (1/3), excluding the reduction made for recoupment of
Example (biweekly): $460.00 x 2=$920.00-biweekly rate
$920.00-$306.67=$613.33-minimum biweekly rate after 1/3
reduction, less any reductions for recoupment of LSA-AF
Example (weekly): $460.00/3=$153.33-maximum reduction, less
any reductions for recoupment of LSA-AF
$460.00-$153.33=$306.67-minimum weekly rate
after 1/3 reduction, less any reductions for recoupment of LSA-AF
The 1/3 reduction limitation does not apply to LSAs of SL or %PP.
will verify that the amount requested matches or exceeds the amount owed or
anticipated by the applicant as listed on the C-32.
LSAs approved prior to 12/1/2004, the rate reduction is effective for the life
of the claim and the rate will not return to the original rate.
2. For LSAs of PTD or death benefits approved on or after 12/1/2004:
BWC may offer the following four (4) repayment options;
Five (5) years;
20 years; or
The applicant’s life expectancy.
a repayment option has started:
i. The reduction will remain in effect for the
remainder of the selected repayment option; and
ii. Cannot be changed to a different option, including early payoff.
The rate of payment of compensation will return to the pre-LSA rate once
the LSA has been recouped.
BWC will not offer a repayment option that:
Exceeds the life expectancy of the applicant; or
Will result in a reduction of the award by more than that which is permitted
for the applicable compensation type.
For LSAs of scheduled loss approved on or after 12/1/2004, BWC shall calculate
the reduction based on the weeks of the award remaining to be paid. When
there are multiple scheduled loss awards payable, BWC may calculate the reduction
from one or more of the awards, as necessary.
BWC will not accept early payoff of an LSA.
H. It is
BWC’s policy to:
applicable family support obligations from an LSA. Refer to the Family Support
and Attorney Fees policy at www.bwc.ohio.gov
for additional information.
the appropriate net present value (NPV) factors for the year the LSA is paid
when reducing weekly benefit amounts. The NPV charts are on BWC’s website
I. LSA Options Form
an LSA of PTD or death benefits approved on or after 12/1/2004, it is BWC’s
policy to complete and send the LSA Options Form to the applicant (and
authorized representative, if represented) for his/her selection of rate
reduction and repayment period.
repayment period options include:
applicant’s life expectancy.
shall not offer a repayment option that:
the applicant’s life expectancy;
the recoupment period past the 18th birthday of a dependent child(ren)
when paying an LSA-AF of death benefits; or
in a reduction of the award that exceeds the amount otherwise permitted for the
type of advancement being granted.
mailing the LSA Options Form, it is BWC’s policy to call the applicant to explain
the LSA options and to determine if it is possible for the applicant to receive
the form by fax or email.
is BWC’s policy to mail the form only if fax or email is not possible.
the form is not returned to BWC within seven (7) days, it is BWC’s policy to designate
the life expectancy option for the weekly reduction.
a courtesy, BWC will contact the applicant (and authorized representative, if represented)
by phone to notify him/her that the LSA Options Form has not been returned,
and, as a result, the repayment option has defaulted to the applicant’s life
may extend the return period an additional five (5) days at the request of the applicant
or authorized representative.
the form is not returned by the expiration of the extension, BWC will designate
the life expectancy option.
is BWC’s policy to:
payment for an LSA directly to the applicant; or
the applicant’s check to the applicant’s attorney if there is a valid Authorization
to Receive Workers’ Compensation Payment (C-230).
is BWC’s policy to issue an order to all parties to the claim to:
deny, or dismiss the LSA; and
i. The reason(s) for the decision;
ii. The amount of the advancement;
amount and duration of any rate reduction; and
other terms regarding the advancement, when applicable.
LSA Order is appealable to the IC but not to court.
is the policy of BWC to forward requests for LSA-AF to the IC. The request must be filed on an Application for
Lump Sum Payment of Attorney Fee (IC-32).
the IC Order allows BWC to do so, BWC will reduce an LSA-AF to the extent
necessary to comply with the following weekly compensation rate reduction
limitations when the advancement, as approved by the IC, will result in a
reduction in the applicant’s weekly compensation rate greater than:
percent (20%) for:
Death benefits; and
and one-third percent (33 1/3%) for SL.
will not withhold family support obligations from LSA-AF.
name of the attorney only shall appear on the warrant.
otherwise ordered by the IC, the reduction for recoupment of an LSA-AF paid
from death benefits will be according to the following succession:
surviving spouse only when there are multiple dependent children and the
surviving spouse is the guardian of all minor children;
surviving spouse and any dependent children who are 18 years or older;
surviving spouse and any dependent children for whom the surviving spouse is
not the guardian when there are multiple dependent children and the surviving
spouse is not the guardian of all minor children; or
the deceased IW and the surviving spouse have 3 dependent children and the
deceased IW also has 2 dependent children from a previous
marriage/relationship. The surviving spouse and all 5 children had the
same attorney represent them and have received an LSA-AF.
dependent child(ren) when there is no surviving spouse.
LSA-AF paid from death benefits must be repaid before the dependent child(ren)
turns 18 years old.
BWC staff may refer to the
corresponding procedure for this policy entitled “Lump Sum Advancement” for