GQ Corner
Q. We are paying TIBs on an ongoing basis and recently received an order from the IRS ordering us to withhold a specified weekly amount to satisfy a lien. Should we reduce the claimant’s benefits to cover the lien, as per the order?
A. Yes. In United States v. Ocean Accident and Guarantee Corp., 76 F. Supp 277 (S.D.N.Y. 1948), the district court held that the IRS could attach a lien to workers’ compensation benefits. The exemption statute at issue was very similar to the Texas exemption statute. The court stated, “[w]hile compensation benefits are, by [state law], declared exempt from all claims of creditors and from levy for recovery of a debt, such exemption cannot be availed of against the Government, which has not by statute or otherwise provided for such exemption.” Id. at 278. This holding was specifically approved in Fried v. New York Life Ins. Co., 241 F.2d 504 (2d Cir. 1957), cert. denied, 354 U.S. 922 (1957). Federal liens (including IRS) are always valid against workers’ compensation benefits per the supremacy clause of the US Constitution, even though they are not specifically mentioned in Texas Labor Code Section 408.203.
Q. The claimant suffered two separate incidents on the same day, resulting in the filing of two separate claims, both of which were accepted as compensable. She has been losing time since the date of the injuries, and it appears each injury is a cause of her reduced wages. We have been paying TIBs in connection with the first claim but just received an impairment rating as to that claim. We agree with the rating. How should I administer indemnity benefits as both claims? Can the claimant receive benefits on both claims at the same time?
A. Yes. You should suspend TIBs and initiate IIBs in accordance with the impairment rating on the first claim, and initiate TIBs on the second claim so long as the evidence supports disability (an inability to obtain and retain employment at wages equivalent to the pre-injury average weekly wage) in connection therewith. The claimant may concurrently receive IIBs on the first claim and TIBs on the second claim because of the differing nature of each benefit type; TIBs are effectively wage-replacement benefits tied to lost time, while IIBs are effectively a compensatory benefit tied to permanent impairment.
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