Workers’ Compensation death claims, otherwise known as fatal claims, provide a measure of relief for families that have lost a loved one due to an on-the-job injury. Section 307 of the Workers’ Compensation Act (77 P.S. § 561) provides for a weekly compensation benefit and burial expenses where a death results from a work injury or an occupational disease. This type of benefit could potentially last a lifetime depending on the facts surrounding the death of an employee. The most common example of a fact scenario that results in a death benefit is when a person is killed on the job. For example, if a construction worker falls from a building and passes away, his spouse and potentially his children would be entitled to a workers’ compensation benefit, which would be based on very specific calculations, outlined in the Workers’ Compensation Act. However, deaths resulting from an accident on the job are not the only example of facts in areas that could potentially produce a death benefit. Another example might be a lethal infection resulting from a surgery needed to treat a work-related injury. However, what exactly is owed to the survivors of such an unfortunate accident?
First, if the injury or death that occurred at work is not immediately recognized as related to work, the dependents of the decedent must first prove that: 1) they are dependents of the decedent; and 2) the death was work-related. While these factors may sound obvious, they are often points of great controversy. For example, if an employee is playing a sport at a work-sponsored event and suffers a fatal heart attack, would her death result in workers’ compensation benefits? The case law on this type of death is rather clear. Even though the decedent was not necessarily in the course and scope of her regular employment, she was certainly participating in an event that was set up by the employer and has some benefit to the employer’s business. Such work functions are generally regarded to further the employer’s business. Thus, generally, in this situation the death of this employee would be considered work-related and any dependents would have a right to a death benefit.
The next question would be who is entitled to a death benefit? It is important to note that even if a worker dies on the job from a clear work injury, if he has no dependents then no fatal claim benefits would be due. Generally, a surviving spouse would be entitled to the death benefit at a rate of 51 percent of the decedent’s pre-injury average weekly wage. If the deceased also had one minor child, the widow and the surviving child would be entitled to 60 percent of the decedent’s average weekly wage. If employee had has two minor children or more, the percentage goes to 66 2/3 percent. The surviving spouse must show that he or she was married to the employee at the time of death, and must actually be dependent on the employee as well. If the surviving spouse lived separately from the decedent and did not have any financial support from the decedent, a workers’ compensation insurance carrier could certainly make the argument that while the couple was legally married, the surviving spouse was not actually dependent on the decedent. With regard to the surviving children, only children under the age of 18 are entitled to be considered at the time of death. However, surviving children would be entitled to be included in the class of dependents up to the age of 23 if they are enrolled in college or graduate school.
The class of dependents is not always so clear. For example, if at the time of death one child is enrolled in college, but then a few months later drops out of college, the number of dependent children who could be included in the class for determination of the percentage to be paid to the dependents might change. Further, what happens if that child re-enrolls in college? Should the percentage go back up? These questions are not immediately clear, and the case law related to these questions is relatively sparse. This is because many claims related to death benefits often settle relatively quickly.
In Pennsylvania, the surviving spouse and any dependent children are entitled to the statutory specific percentages of the decedent’s average weekly wage. The pre-injury average weekly wage calculation itself can be quite complicated, but in simple terms it is typically a snapshot of the earnings from year preceding the employee’s date of injury. This average weekly wage forms the basis of the death benefit to be paid.
Generally, death benefits are payable to the surviving spouse so long as she lives and does remarry or enter into a “meretricious relationship.” This term has generally been considered to describe when a surviving spouse either lives with or marries another person. However, it is questionable whether the mere act of sexual relations with another person would render the surviving spouse ineligible for any further death benefits. For this reason alone, these cases often settle before the benefits are paid for many years. Death claim cases settle for a number of other reasons as well. If the surviving spouse dies for any reason, the only additional benefits owed would be to any surviving children so long as they are either under the age of 18 or under the age of 23 and enrolled in a college or graduate school. Thus, if a surviving spouse were to die after the surviving children reach the age of 23, the death benefit would essentially end. Thus, surviving spouses often elect to try to settle the case for some type of lump sum to guarantee that the family of the decedent gets some money. So the question becomes, what is the value of a death claim if it is paid in a lump sum?
To answer this question, attorneys will often use the U.S. Life Tables or other actuarial methods to try to predict the life expectancy of the surviving spouse. For example, a surviving spouse who is 50 years old may have a life expectancy of 30 years. That spouse may be entitled to a weekly check of $600. Thus, the resulting yearly rate would be $31,200. If the surviving spouse were to receive those benefits for 30 years, or her life expectancy, the resulting total would be $936,000. So would the value of the case be $936,000? The simple answer is no. A more accurate method is to try to determine the present value of the expected stream of income. The present value of the stream of $600 per week for 30 years is similar to figuring out how much a similar annuity would cost. Of course, the present-day value of $936,000 paid as an annuity over 30 years is much less than $936,000. The exact calculations related to the above example go beyond the scope of what this article covers. However, the important question the surviving spouse must ask is how much money is the insurance company willing to pay right now to avoid the possibility that the surviving spouse may live well past their life expectancy? Further the surviving spouse must ask themselves whether they believe that they will be unmarried and living alone over the next 10, 15, or possibly 20 years. This question is difficult to contemplate immediately following the death of a loved one. However, the surviving spouse must ask herself whether she will remain unmarried and living alone for the rest of their lives. This answer may be easy if the surviving spouse is at an advanced age. However, if the surviving spouse is 35 years old, can that person reasonably expect that they will live out the rest of their lives without entering into a new relationship?
These are just some of the questions that come up when deciding how to proceed with the death claim. The initial step is to establish that there is in fact a valid death claim. Once that occurs, neither the insurance company nor the surviving spouse is under any obligation to settle the claim. However, because of the uncertainty of how much will be paid and for how long, both parties will typically have an interest in working out a resolution that shares the risk among all the parties. One thing is clear — experienced workers’ compensation counsel is a must for anyone going through the very sad situation of an untimely death of a loved one caused by work. The situation is difficult enough. It is important for surviving spouses and children to learn their rights and to have competent counsel direct them through the process of litigation and settlement.
Daniel E. McCabe, Esq., is an associate in the law firm of Wolf, Baldwin & Associates, P.C. He and managing attorney Levi S. Wolf are two of less than 200 lawyers across the state who have been certified as specialists in the practice of workers’ compensation law by the Pennsylvania Bar Association’s Section on Workers’ Compensation Law as authorized by the Pennsylvania Supreme Court. His practice, located in the firm’s West Chester office, concentrates on the representation of injured workers and medical providers. He can be reached by phone at 610.436.8300, or by e-mail at email@example.com.