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ABILITIES IN MOTION
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Pennsylvania
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Remember those who died on the job and pray for their
families.
MAK |
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October 22, 2002
No Tax Forgiveness, No Social Security or Medicare Contributions for Injured
Workers
Expressed opinion by Michael A. Kerstetter, PFIW
Dauphin County
Under
Section 306 of the
Pennsylvania Worker’s Compensation Act one third of an injured workers gross
income is forfeited to the employer/worker's compensation insurance company when
an injured worker starts to receive compensation for lost wages. This appears
to represent the local tax, State tax, Federal tax, Social Security tax,
Medicare tax and other taxes that would deducted from a normal paycheck.
It is not exactly clear why the figure of a one-third deduction is used but I
can tell you that it is an unfair amount. Add the 20 % an attorney
receives for the litigation portion of a worker's compensation claim and an
injured worker has given up 50% of his/her gross income just for being injured
on the job. Here are a couple of reasons why this section of the
Pennsylvania Worker's Compensation Act is flawed:
- When on worker's compensation an injured
worker cannot file a federal, state, or local income tax return. This is
unfair because the tax rate for a working person is adjusted when they file a
tax return. The Pennsylvania Worker's Compensation Act prohibits an injured
worker from filing a tax return therefore taking away any tax forgiveness they
may be entitled too. An injured worker ends up forfeiting more money for the
representation of tax payments than the working counterpart. How does this
help an injured worker?
- Another problem with this
policy is there will be no credit for the Social Security tax withheld while
on workers compensation. This takes away from the individuals retirement
for Social Security while he/she is on worker's compensation. This means
that because of a work related injury a worker will receive less retirement
under Social Security because no contributions were made during the recovery
period of a work related injury. How does this help an injured worker?
- Another problem with this
policy is there will be no credit for the Medicare tax withheld while on
workers compensation. This takes away from the individuals medical
coverage during retirement. This means that because of a work related
injury a worker will receive less medical coverage during retirement under
Medicare because no contributions were made during the recovery period of a
work related injury. How does this help an injured worker?
Section 306. The following schedule of compensation is hereby
established:
(a) (1) For total disability, sixty-six and two-thirds per centum of the wages
of the injured employee as defined in section 309 beginning after the seventh
day of total disability, and payable for the duration of total disability, but
the compensation shall not be more than the maximum compensation payable as
defined in section 105.2. Nothing in this clause shall require payment of
compensation after disability shall cease. If the benefit so calculated is less
than fifty per centum of the Statewide average weekly wage, then the benefit
payable shall be the lower of fifty per centum of the Statewide average weekly
wage or ninety per centum of the worker's average weekly wage.
During a recovery period for a work related
injury an injured worker can use all the help possible to stay on top of their
finances. This should include all contributions for medial coverage, retirement and tax
forgiveness. Life is tough enough for an injured worker without worrying
about other health issues besides the work injury and finances. Neither the employer or the injured worker benefited from
the one-third gross pay deduction, when a worker's compensation claim is filed.
The worker's compensation insurance company pocketed all of that money as
windfall profits. Why did the worker's compensation industry receive such
a good deduction from the Pennsylvania Legislature and then turn around and not
give any of it back to help reduce the cost of worker's compensation for
Pennsylvania businesses? They are greedy!
Legislation is needed to put this money back in
the hands of the injured worker, where it belongs. Perhaps an injured
worker would be better served with the right to sue an employer instead of of
receiving worker's compensation that seems more and more to support the worker's
compensation insurance industry.
Where is the help for the
injured worker?
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