Inflation has been discussed a lot on the news. We have seen increases in the cost of various items that we buy – bread, milk, gas, and a number of other things.
Inflation can really hit hard when you depend on a workers compensation check as income. Prices increasing results in you being able to purchase less and less with the amount that workers compensation pay each week.
Wages often go up when there is inflation. Do Georgia’s workers compensation laws have something built in to provide for an increase in workers compensation check amounts when there is higher inflation?
Does your workers compensation check amount ever go up?
Unfortunately, the answer to this questions is currently “No” under the law in Georgia. Your workers compensation check does not ever go up once it has been judicially determined.
Other types of benefits are different. They are subject to a “Cost of Living Adjustment” (COLA). This means that the amount of the benefit generally is adjusted for inflation each year.
Some types of benefits which have cost of living adjustments are:
- Social Security benefits
- Veterans disability benefits
- Some long term disability benefits (depends on the language in the long term disability policy)
When these benefit amounts adjust for inflation, it allows those receiving the benefit to purchase roughly the same amount of good and services that they could before. Even though prices have gone up, their benefit has gone up as well because of the cost of living adjustment.
But, workers compensation does not having a cost of living adjustment in Georgia. This means the purchasing value of your workers compensation check decreases when there is significant inflation.
Do some states have cost of living adjustments for workers compensation?
Yes. The laws in some states do have cost of living adjustments on workers compensation benefits. These laws help injured workers survive on the amount that workers compensation pays when they suffer a catastrophic injury and have difficulty ever returning to work.
The effects of this cost of living adjustment can be really significant for a severely injured worker. Let’s take an example of an injured worker in Georgia with no cost of living adjustment versus an injured worker in another state with a 2% cost of living adjustment per year. Let’s also assume that both had a starting workers compensation check amount of $500 per week.
The first year, the worker with the cost of living adjustment would receive $500 before it was increased by 2% to $510. After 5 years, the worker would be drawing $552.04 per week. After 10 years, it would have increased to $609.50 per week.
The worker in Georgia would always be stuck at $500. So, 10 years in the future the check amount would be $500. Even though they started at the same amount, the worker in Georgia would now be getting more than 20 percent less than the worker in the state with the 2% cost of living adjustment.
This difference gets even greater if the cost of living adjustment percentage is higher than 2%. For example, a 4% cost of living adjustment would result in a $500 workers’ compensation check increasing to over $740 in 10 years. So, it really hurts that Georgia’s workers compensation laws do not have a cost of living adjustment.
Can the amount of my workers compensation check ever go up in Georgia?
Yes. There are times when your workers compensation check amount can increase. This can happen when the insurance company does not calculate your check amount correctly.
Insurance companies often screw this up. We always check to make sure our clients have had their workers compensation check amounts calculate correctly. If not, we contact the insurance company to get that corrected and to get our clients paid backpay and late penalties for the underpayments.
Also, the maximum workers compensation check amounts do sometimes increase. For example, in July 2022, the maximum temporary total disability benefit rate will increase from $675 per week to $725 per week.
Unfortunately, this does not increase check amounts for people who were already receiving workers compensation checks. The increase in the maximum check amount only applies to injuries that occurred after the new law goes into effect.
Does the amount I get reimbursed for workers compensation mileage go up when gas prices are higher?
Not currently. The amount of the mileage reimbursement is set by the rules of the State Board of Workers’ Compensation. Board Rule 203(e) provides that mileage is reimbursed at 40 cents per mile. That rate has not increased since in over 15 years.
The mileage reimbursement rate becomes especially difficult when gas prices are higher and the cost of maintaining a vehicle has increased as well. When this happens, the amount reimbursed for mileage is simply not enough to pay for the cost associated with driving your vehicle to get medical treatment.
If higher inflation continues, this will become more of an issue. The mileage reimbursement rate has been adjusted in the past to account for the increase in the cost of driving and maintaining a vehicle.
What can be done to avoid the problems that inflation causes with Georgia’s workers compensation laws?
There are a couple of things that could be done to address the issues that inflation causes. The first thing would be to change the laws so that workers compensation benefits in Georgia adjust for inflation.
This type of change would prevent the drastic effects that inflation has on injured workers who are receiving Georgia workers compensation benefits. Adding in a cost of living adjustment on benefit amounts and increasing the amount reimbursed for mileage would help offset the harms of inflation.
But, changes in the workers compensation laws and rules are not in your control. The changes in the law depend on the Georgia legislature. The changes in the State Board rules depend on the directors of the State Board of Workers’ Compensation with advice from workers compensation system stakeholders.
Since you cannot control these things, one of the best things you can do is try to avoid spending a long time in the workers compensation system. Inflation hits hardest when you spend years in the system. If you can:
- Get the medical treatment you need,
- Recover from your injury, and
- Then get out of the system through settlement or otherwise
That could help you minimize the negative effects of higher inflation. Navigating the workers compensation system to get the treatment you need quickly can be difficult though. Do not hesitate to reach out for help if you need it.