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Do You Have to Pay Back Workers’ Comp in New York?

Workers’ compensation is meant to provide financial relief when you’re injured on the job, but what happens if you’re told you need to pay some of it back? While most workers in New York don’t have to repay their benefits, there are certain situations where repayment might come into play. Learn more below!

What Is Workers’ Compensation?

Workers’ compensation is an insurance program mandated for employers in New York. Its primary purpose is to provide financial support and medical benefits to employees who suffer injuries or illnesses due to their job.

 

The benefits offered under workers’ compensation are extensive and typically include:

Medical Coverage
Wage Replacement
Vocational Rehabilitation

When Does It Start and How Long Does It Last?

Workers’ compensation benefits typically begin shortly after an injury is reported. How long they last depends on the severity of the injury and the recovery time. For a closer look at timelines, you can refer to our dedicated blog post here.

Do You Have to Pay Back Workers’ Comp in New York?

Most of the time, you don’t have to pay back workers’ compensation benefits. However, in specific situations, an employee may be obligated to return some or all of the benefits received.

Why Would You Have to Pay Back Workers' Comp?

Overpayment of Benefits

If the Workers’ Compensation Board determines that you received more benefits than you were entitled to, you may be required to repay the excess amount; this could occur due to clerical errors, miscalculations, or failure to report a return to work.

Third-Party Settlements

If someone outside your workplace caused your injury and you win a personal injury lawsuit against them, your workers’ comp insurer may ask to be reimbursed for the benefits they already paid because they have a lien on any settlement or judgment you receive.

Returning to Work While Still Getting Benefits

As mentioned above, if you go back to work but continue to collect workers’ compensation without letting your insurance carrier know, it could create overpayment issues. You should always report when you return to work to avoid problems.

Do You Pay Taxes on Workers' Comp?

No. One of the advantages of workers’ compensation benefits is that they’re generally exempt from income tax. That means the money you get while recovering from a work injury is yours to keep in full, without income taxes being taken out.

Steps to Take If You Need to Repay Workers’ Comp

If you ever have to pay back workers’ compensation benefits, it pays to be prepared. Here are a few steps you can take to make the process a bit easier:

 

  • Review the Repayment Notice. Double-check that the repayment amount matches your records and is correct.
  • Consult with a Workers’ Compensation Attorney. A lawyer can explain your rights, help dispute mistakes, or work out a repayment plan that eases the financial burden.
  • Communicate with Your Insurer. Communicating early and clearly with your insurance company can help prevent further complications down the line.

Can Workers' Comp Stop Paying Without Notice?

In New York, your insurance company must notify you right away if your workers’ comp benefits are being denied or changed, and they have to explain why. Benefits can stop for reasons like recovery from your injury, not following program rules, or suspected fraud. You may have the right to challenge the decision if your payments are cut off without proper notice.

How a Worker's Compensation Lawyer Can Help

Workers’ comp can be complicated, especially if repayment becomes an issue. Having an experienced attorney on your side can make the process much easier. A lawyer can stand up for you in disputes and even negotiate repayment terms that reduce your financial stress.

Key Takeaways

Workers’ compensation benefits usually don’t have to be paid back, except in certain situations.

Repayment could be required if you get paid too much, receive a settlement from a third party, or go back to work while still collecting benefits.

Talking with an experienced attorney can help you handle any repayment issues.

Let Our New York Attorneys Fight for You

If you’re worried about having to repay workers’ comp benefits or just want to better understand your rights, Field Law Group is here for you! We know this process can be stressful, and our team is ready to stand by your side.

 

Contact us today or call 212-739-7278 to schedule a FREE consultation with our firm. Your recovery comes first, and we’ll fight to make sure you get the benefits you deserve.

 

About the Firm: With over a decade of experience, Field Law Group has been helping personal injury victims across New York since 2013. We’re dedicated to protecting the rights of accident victims and fighting to get them the compensation they deserve.

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