The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

An Appeal Panel review was held on April 14, 2000, at the request of a worker advisor, acting on behalf of the claimant's estate.

Issue

Whether or not the estate is entitled to a commutation of the claimant's permanent partial disability pension.

Decision

The estate is not entitled to a commutation of the claimant's permanent partial disability pension.

Background

During the course of his occupation as a miner on October 13, 1984, the claimant sustained a compensable injury to his left shoulder when he slipped over a steel cable landing on cement. In recognition of the accident, the claimant received a 30% impairment rating for the left shoulder injury which was converted into a monthly pension.

In November 1993, the claimant was advised that his wage loss benefits would be replaced by Special Additional Compensation (SAC) in accordance with Section 40(2) of The Workers Compensation Act (the Act). The SAC award would then be reviewed annually and may continue until the claimant's anticipated retirement date, which was established to be June 30, 1999.

On January 26, 1999, a solicitor, acting on behalf of the claimant, wrote to the WCB to inquire about a "payout" on the claim. In response to the request, Claims Services wrote to the solicitor on February 4, 1999, indicating the following:

"Please be advised certain criteria must be met prior to the commutation of a monthly pension. If the commutation would result in a lump sum payment of greater than $25,000.00 but less than $75,000.00, and the worker is not in receipt of special additional compensation or periodic payments of any kind and has not been for six months, the WCB will grant a commutation as authorized by section 26(2) of the Workers Compensation Act unless the WCB is aware of a compelling argument against such a commutation.

Mr. [the claimant's] lump sum payment would be in the amount of $69,673.44. As he is still in receipt of special additional compensation he does not meet the criteria as outlined above. Should Mr. [the claimant] still wish to pursue this matter at this time he should submit a letter outlining his plans for the money. This would be reviewed and you would be advised of our decision."

In a subsequent letter dated February 11, 1999, the claimant outlined some of the plans he had for the money. This included paying off outstanding debts, purchasing a new vehicle as well as other household goods. The balance would be put to general living expenses. The claimant also requested that any lump sum amounts be forwarded to his solicitor "in trust" along with any documentation that needed to be signed.

In response to the above, Claims Services wrote to the claimant on March 14, 1999, indicating the following:

"Please be advised I should have also advised the policy stipulates workers applying for a commutation greater than $25,000.00 are not permitted to use a commutation to create an estate in a circumstance where the worker is known to be at risk of early death from either a compensable or non-compensable cause. Applicants may be required to provide evidence from their physician.

As we have not had updated medical information on your file since 1994, we would appreciate if you would you have (sic) your physician provide our office with a report outlining your current medical status and what medical ailments, if any, you suffer from."

A medical report, dated April 12, 1999, was received from the claimant's attending physician. The physician stated that the claimant had been suffering from prostate cancer with pelvic/bone metastases since 1998. He had been receiving hormonal treatment and had been responding to the treatment. The physician reported that the claimant also suffered from cardiovascular disease and high blood pressure and that both conditions were well controlled and stable with medication. Further medical information was also obtained from a specialist dated September 14, 1999, regarding the claimant's medical condition as of July 20, 1998.

On August 11, 1999, the claimant's wife called to advise that her husband passed away on July 4, 1999 due to a heart attack.

In a letter to the widow dated September 29, 1999, the WCB advised that WCB policy stipulates that workers applying for a commutation greater than $25,000.00 are not permitted to use a commutation to create an estate. Monies were set aside to pay a monthly pension for a permanent impairment. Should the worker pass away as a result of the injuries or ill health the balance of the funds will then revert back to the employer who had initially been charged with the costs of the claim. As a result, the WCB would not be pursuing the request for a lump sum settlement of the pension award.

On December 17, 1999, a worker advisor disagreed with the above decision. The worker advisor was of the position that the claimant made the request for a pay out prior to his death. While he may have had cancer he did not die as a result of that medical condition but rather from a myocardial infarction which was totally unexpected. The worker advisor argued there was no reason whatsoever that the claimant's request could not be granted as the request was made prior to his demise and could have been paid when SAC had ended on June 30, 1999.

In a decision dated February 18, 2000, Review Office determined there was no entitlement to a commutation of the permanent partial disability pension. When rendering its decision, Review Office took into account Section 26(2) of the Act, point 3 of WCB policy 44.100.10 referring to lump sum commutations, and also outlined several administrative guidelines.

Review Office took into consideration medical information which showed that the claimant's medical condition (cancer) was not stable, with a poor prognosis, placing the claimant at imminent risk of an early death. "Although the cancer was not the cause of the claimant's demise, it certainly would be a cause for concern to the board and on it's own, justify our denial for granting a commutation of the disability pension. The request for commutation of the disability pension in our view can be seen for the purpose of creating an estate."

On March 8, 2000, the worker advisor appealed the Review Office's decision and a non-oral file review was arranged.

Reasons

The issue in this appeal is whether or not the estate is entitled to a lump sum commutation of the claimant's permanent partial disability pension.

The relevant subsection of The Workers Compensation Act (the Act) is subsection 26(2) which provides for lump sum payments. Relevant WCB policy is Section 44.100.10, Lump Sum Commutations.

Subsection 26(2) states:
Lump sum payments
26(2) The board may, with the consent of the worker or dependant to whom it is payable, but not otherwise,

1. commute the whole or any part of the periodical payments due or payable to the injured worker or any dependant to one or more lump sum payments to be applied as directed by the board; or
2. divide into periodical payments any compensation payable in a lump sum.

The relevant parts of WCB Policy Section 44.100.10, Lump Sum Commutations, state:

B. Policy

"The WCB will consider a request from a worker for commutation of periodic payments arising from a permanent impairment award according to the following criteria:

3. If the commutation would result in a lump sum payment of greater than $25.000.00 but less than $75.000.00, and the worker is not in receipt of special additional compensation or periodic payments of any kind and has not been for six months, the WCB will grant a commutation as authorized by section 26(2) of the Workers Compensation Act unless the WCB is aware of a compelling argument against such a commutation .

Applicants applying for commutation under No's 3 and 4 above will not be permitted to use a commutation to create an estate in a circumstance where the worker is known to be at risk of early death from either a compensable or non-compensable cause. Commutation applicants may be required to provide existing evidence from their physician."

In considering this appeal we have reviewed all the evidence on file and find that the evidence, on a balance of probabilities, supports a conclusion that the estate is not entitled to a lump sum commutation of the claimant's permanent partial disability pension.

The evidence reveals that the claimant was in receipt of a permanent partial disability pension based on an impairment rating of 30% for a compensable left shoulder injury which occurred on October 13, 1984. On November 15, 1993 the claimant was informed that his wage loss benefits would be replaced by special additional compensation benefits (SAC) under subsection 40(2) of the Act and he was advised that his award would be reviewed annually and may continue until his anticipated retirement date established as June 30, 1999.

Commencing in January 1999 applications were made to the WCB to have the disability pension paid out as a lump sum commutation. Initially from the relevant early correspondence on this file, there appeared to be some lack of communication between the WCB and the claimant over the eligibility criteria which are applied when considering a request for a lump sum commutation of a permanent partial disability pension. However, having considered this file in its entirety and after a careful review of the eligibility criteria set out in the policy, we noted the following in arriving at our decision.

We note from the facts of this case that the commuted value of the claimant's pension at the time it was calculated clearly places the claim within the criteria of point 3 of the policy in that the pay out value would have been more than $25.000.00 but less than $75.000.00. We further note that the claimant was in receipt of special additional compensation benefits (SAC) which were due to end June 30, 1999 when the claimant reached the age of 65 years.

With respect to the criteria of the policy concerning a lump sum commutation, the claimant would not have been eligible for any lump sum pay out until six months after SAC benefits ceased. Therefore the claimant would not have been eligible, in any event, until December 31, 1999.

Regrettably, we note that the claimant passed away July 4, 1999 and accordingly never reached the position of being entitled to a lump sum payment under the policy. We find therefore that at the time of application the WCB was not in a position to grant a lump sum commutation to the claimant.

In addition, on an application by a claimant for a lump sum commutation of a permanent partial disability award, the policy allows the WCB to inquire as to the claimant's medical condition as part of its consideration of a claimant's entitlement to a lump sum payment. In particular, this investigation is linked to the requirement that the commutation not be used to create an estate where the worker is known to be at risk of an early death from compensable or non-compensable conditions.

The medical evidence clearly indicates that the claimant was at significant risk of an early death from a multiplicity of non-compensable medical conditions. In this regard we note a narrative report dated September 14, 1999 from a treating medical specialist who last examined the claimant on July 20, 1998 but was unaware that the claimant had passed away on July 4, 1999.

In this report the specialist documented the multiplicity of medical conditions found at the time the specialist last examined the claimant and the specialist's opinion that he was surprised the claimant was still alive and that the claimant's life expectancy was almost certainly less than five years.

We therefore find the decision of the WCB to decline to commute the value of the pension was also warranted under the policy criteria regarding the creation of an estate in circumstances where the worker is known to be at risk of an early death from either a compensable or non-compensable condition as well.

We are therefore unable to grant the request for a commutation of the claimant's disability pension and the appeal on this issue is denied.

Panel Members

D.A. Vivian, Presiding Officer
A.Finkel, Commissioner
R. Frisken, Commissioner

Recording Secretary, B. Miller

D.A. Vivian - Presiding Officer
(on behalf of the panel)

Signed at Winnipeg this 25th day of April, 2000