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New Jersey Legislature Passes Supplemental Benefit for Certain Public Employees or Dependents of Those Employees

On February 25, 2019, the New Jersey Legislature voted to send to the Governor’s desk Senate Bill No. 1967.  The Senate passed the bill on October 29, 2018 and the General Assembly passed it on February 25, 2019. The Governor is expected to sign the bill shortly.

The original bill was intended to provide a cost of living (COLA) for all workers rendered totally and permanently disabled, or to the dependents of workers, who died as a result of a workplace injury after December 31, 1979.  The stated purpose of the legislation was to mirror the Special Adjustment created in the 1979 amendments for that same class of workers injured or killed before December 31, 1979, (RS. 34:15-95.4).  The bill was amended to limit the payment to Public Safety Workers or their dependents in the case of work-related death from workplace injury.

The legislation defines Public Safety Workers in paragraph 4(e): “For the purpose of this section, ‘Public Safety Worker’ means a member, employee, or officer of a paid, partially-paid or volunteer fire or police department, force, company or district, including the State Police or a first aid or rescue squad.”  Note that this definition does not include hospital EMTs or private fire departments at large plants operated by the private sector.

Funding for the special adjustment comes from an increase in the assessment for the Second Injury Fund which is levied on insurance premiums payable by private employers for their workers’ compensation policies.  A like assessment is made on self-insured companies.  These assessments affect only private sector employers.  The State of New Jersey and its subdivisions are not liable for the Second Injury Fund assessment.  Therefore, the funding is collected from the private sector for which the benefits do not apply.  This results in the bill having no fiscal impact on the state or local budgets, but it will have a fiscal impact on private employers.

Those covered by this bill will be eligible for the special adjustment as of July 1, 2019 but not retroactive to the date of the award of Total Permanent Disability or death of the “Public Safety Worker.”  Going forward, the public employer shall identify those eligible and report them to the Office of Special Compensation.  The public employer will continue to pay at the rate set at the time of the award of permanent disability.  The Second Injury Fund, Office of Special Compensation will pay the amount sufficient to bring the total award to the same percentage to maximum rate for the current year.

Example:        Police officer is injured and deemed totally and permanently disabled as of July 1, 2002.  The officer is earning wages of $900 per week and the maximum rate for permanent total disability is $629 per week in 2002.  The officer receives an award payable at $629 per week for 450 weeks and continuing so long as the officer is permanently disabled under the terms of N.J.S.A. 34:15-12b. (Officer’s salary is sufficient for the maximum rate in 2002).  Effective July 1, 2019, the officer will be paid $629 per week by the employer and will receive $292 per week from the Second Injury Fund by way of the Special Adjustment bringing the officer to the maximum rate for 2019.  Because the officer qualified for the maximum rate at the time of the award, the officer is eligible for the maximum rate in the year of the special adjustment.

The COLA will be reduced for beneficiaries to the extent necessary to ensure that inflation adjusted benefits do not cause a reduction of Federal Social Security disability benefits. COLA benefits are also to be reduced by the original amount of any Social Security benefits (but not the amount of any Social Security disability benefits and any subsequent cost-of-living increase in Social Security benefits), Black Lung benefits, or the employer’s share of disability pension payments received from or on account of an employer.

The COLA will be denied to an otherwise eligible Public Safety Worker who is also eligible for SSD but will not apply.  In virtually all cases, the Public Safety Worker will be eligible for an Accidental Disability Pension, and the Division of Pensions and Benefits will take the offset.

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Judge Richard E. Hickey III (Ret.)

About the Author

About the Author:

Prior to joining Capehart Scatchard as Of Counsel, Judge Hickey III (Ret.) served as the Compensation Administrative Supervisory Judge for the State of New Jersey from 1991 to 2009. Previous to his judgeship, he served as a Prosecutor in Gloucester County, New Jersey from 1986 to 1991.

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