7.9 Payment of Awards

• Library: Workers' Compensation Practice in Virginia (Virginia CLE) (2020 Ed.)

7.9 PAYMENT OF AWARDS

7.901 Payment.

A. Schedule. Entry of an award for workers' compensation wage loss or permanent partial benefits provides for the weekly payment of benefits. In practice, the employer or carrier may issue checks every two weeks. The payment must be made within two weeks after it becomes due or be subject to a penalty. ³⁰³

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B. Lump Sum. The payment of benefits in a lump sum is normally reserved for cases in which there is an outstanding award for permanent partial disability. Unlike a compromise settlement, approval of a lump sum payment does not close off the right to file for future wage loss or medical benefits. It simply allows for a current award of permanent partial benefits to be paid in a lump sum rather than weekly. Virginia Code section 65.2-522 provides that when the parties agree and the Commission determines it to be in the best interests of the employee or his or her dependents, or when it will present a hardship on the employer or carrier, a partial or total lump sum payment of compensation may be made. Where an employer or carrier seeks to make a lump sum payment, it will only be approved if it does not prejudice the interests of the employee or his or her dependents. A lump sum settlement is usually calculated on an annuity basis and involves payment under an award for a fixed period. This amount of future compensation benefits is commuted and paid in a lump sum at a discounted rate. The amount of the payment is fixed by the Commission, "but in no case shall the sum awarded be less than a sum equal to the present value of future compensation payments commuted, computed at four percent true discount compounded annually." ³⁰⁴

Before the Commission will approve a lump sum payment of an award, it must be furnished sufficient information to determine whether the payment is in the best interests of the injured employee. ³⁰⁵ Approval of a lump sum requires the worker's injuries to be stabilized ³⁰⁶ and for there to be an outstanding award for permanent partial disability. The Commission may require information as to how the funds will be used, including any financial plan for investment, and the worker's capabilities in handling the funds. ³⁰⁷

C. Recipients of Compensation Awards. Awards of compensation must be paid directly to the injured employee or, in a death case, to the beneficiary. This is true even if the party is represented by counsel. ³⁰⁸

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7.902 Penalty for Delayed Payment. If any payment is not made within two weeks after it becomes due, a 20-percent penalty will be added to the compensation. ³⁰⁹ Section 65.2-524 of the Virginia Code provides that "[n]o such penalty shall be added, however, to any payment made within two weeks after the expiration of (i) the period in which Commission review may be requested pursuant to [section] 65.2-705 or (ii) the period in which a notice of appeal may...