Maryland Workers’ Compensation Dependency Benefits – The 2011 Legislation

By Clifford Sobin, Esq.

As of October 1, 2011, Maryland’s manner of compensating dependents of employees who die due to injuries or diseases sustained as a result of their job has changed! The new law will immediately impact all employees and their dependents other than employees of municipal corporations or counties that have a right to claim their:

1) heart disease

2) hypertension

3) lung disease

4) Lymes disease; or

5) cancer

is presumed to be caused by the job. These presumptions are given to all fire fighters and police officers, some deputy sheriffs and correctional officers, and some employees of the Maryland- National Capital Park and Planning Commission. The excluded employees may be included at a later date if the county or municipal corporation they work for “opt in” to the new statute.

The changes eliminate the distinction that has existed for decades between partially and fully independent individuals. The distinction created windfalls for some and despair for others. Until the new law, a dependent whose spouse was killed in a tragic occupational injury would usually receive benefits:

1) if she was found fully dependent for life (with some exceptions) at the rate of 2/3 the deceased’s average weekly wage, not to exceed the State average weekly wage, for the rest of her life; or

2) if she was found partially dependent (with some exceptions) at the rate of 2/3 the deceased’s average weekly wage, not to exceed the State average weekly wage, but only until $75,000.00 is paid out.

It was, and still is for those that remain impacted by it, a terribly unfair law. If the deceased’s spouse was working a part time job at the time of the job related death, the spouse would receive only $75,000 compared to potentially over a million dollars for the spouse who was not working. There was no in between!

Rather than focusing on the amount each individual receives, the new law focuses on the amount of the payment. The intent is that dependency payments reflect the amount of support the decedent provided.

To achieve the new “fairness” the Act introduces the new concept of “family income”. Family income is the total of the average weekly wage (hereinafter referred to as AWW) of the deceased, combined with the AWW of all of the dependents. The AWW of the deceased is based on the deceased’s AWW at the time of the accidental injury of disablement from occupational disease.

Once the family income is calculated, the deceased’s AWW is:

a) divided by the family income and reduced to a percentage;

b) the percentage is multiplied by the maximum death benefit which is equivalent to two-thirds of the decedents AWW not to exceed the State AWW;

c) the total represents the maximum cumulative amount that is paid to all dependents; and

d) the only exception to this rule is if the decedent’s AWW was $100.00 or less, then the weekly dependency benefit shall be equal to the AWW without any reduction based on the percentage calculation discussed above.

The following example brings clarity to the arcane discussion above. Assume:

1) Decedent’s AWW = $1200.00

2) Dependent 1 AWW = $200.00

3) Dependent 2 AWW = $100.00

Calculations

a) Total family income is $1500.00 ($1200 +$200 +$100)

b) Maximum death benefit is $800 (2/3 of decedent AWW of $1200)

c) Percentage of Decedent’s income to family income is calculated as follows: decedent’s AWW-1200/ family income-1500 = 2/3 or .667 percent

d) Amount payable to all dependents collectively is $533.34 calculated by multiplying .667 (percentage of decedent’s income to family income) * $800 (maximum death benefit)

The payments are made for a maximum of twelve years retroactive to the date of the death of the decedent unless one of the following occurs:

1) the dependent’s dependency ceases;

2) the dependent is a spouse that remarries, in which case the spouse’s benefits cease two years after the marriage;

3) the dependent(s) are not children of the deceased or the deceased’s spouse, in which case the maximum total payment to that class of dependents is $65,000.00, modified by annual State AWW adjustments beginning January 1, 2012;

4) the date the deceased would have reached the age of seventy years old if the deceased had not died, in which case dependency benefits cease unless dependency benefits have been paid for less than five years in which case benefits continue until five years of dependency benefits have been paid; or

5) a child reaches the age of eighteen unless the child continues to attend school on a full-time basis at a school that offers an educational or accredited vocational training program accredited or approved by the State Department of Education, in which case the child can continue to receive dependency benefits until the age of twenty-three; or

6) A dependent child or spouse remains incapable of self-support (due to mental or physical disabilities that pre-existed the decedent’s death) after their benefits would otherwise be ended, they will continue to receive benefits until their disability ends.

The Workers’ Compensation Commission determines the amount of benefit each dependent receives

The Workers’ Compensation Commission is granted broad discretion to apportion the amount of benefit each dependent receives when there is more than one dependent. The only guidance provided by the statute is that the determination must be “just and equitable”.