Must I report other income while on Workers’ Comp?

Some times when an injured worker is on workers’ compensation wage loss benefits, they may want to work part-time to TRY and ‘make up the difference’ from workers compensation payments. The question is, must other income be reported while on workers’ compensation?

The answer to that question is an emphatic YES.

Failing to do so will lead to an overpayment and could be perceived as fraud. The workers’ compensation insurance carrier will seek the overpayment by filing a modification/suspension petition to recoup the overpayment and could also result in criminal charges for fraud.

In most cases, the insurance carrier will send out LIBC forms to verify whether an injured worker is receiving any other income. They can send these out every six months. These forms exist because of the anti-fraud provisions of the Pennsylvania Workers’ Compensation Act. These provisions require an injured worker to report any income you receive while receiving workers’ comp wage loss benefits. Why? Because under the Act, if you have other income, workers’ compensation has a statutory right to a credit for that other income. In other words, they have a right to reduce your wage loss benefits by the amount of other income. It is important to note that other income also includes self-employment income.

How does receiving other income work?

Let’s assume you have an average weekly wage (AWW) is $900.00 per week. In 2024, that AWW would entitle you to $662.50 per week in wage loss benefits. Let’s assume you get a part-time job making $400.00 per week, while receiving the $636.50. Here is how the calculation works. We take your AWW of $900.00 and subtract the $400.00 in part time income you receive leaving a partial of $500.00. You do not receive $500.00. You will receive a partial rate of 2/3 that amount. So your checks would be reduced from $636.50 to $333.50. That is $500.00 multiplied by 2/3 which is $333.50. Not reporting that income is an overpayment of $303.00 per week (636.50-333.50 – $303.00). So if you have had that job for 8 weeks and never reported the income, then there is an overpayment of $2,424. The workers’ compensation insurance carrier has a right to recoup that overpayment. They can do so by filing a modification petition asking a Judge to further reduce your benefits to recoup that overpayment. So if your checks can and will be reduced even more to capture that overpayment. You have to pay it back.
The moral of this story is to be sure to report any additional income you earn while receiving workers’ compensation wage loss benefits. Insurance carriers have ways of finding out. They will find out. Don’t risk it. Doing so is fraud.

If you have been injured at work, call Mooney Law for a FREE CONSULATION. Workers’ compensation is an extremely complex area of law. That is why most workers’ compensation attorneys practice only in workers’ compensation. Trust Mooney Law to protect and defend your right to benefits. We are trusted, experienced, and proven. Call today at 717-632-4656 or 717-200-HELP. You can also visit our website and click on the Schedule a Consultation form. Finally, feel free to follow my Facebook page for updated workers’ compensation information.

Mark Buterbaugh

Attorney representing injured workers and Social Security Disability clients in Pennsylvania and Maryland.