The Subsequent Injuries Benefits Trust Fund (SIBTF)

The Subsequent Injuries Benefits Trust Fund (SIBTF) was formerly known as the Subsequent Injuries Fund (SIF).  These are complex cases involving catastrophic injuries.  A SIF case is present when pre-exisiting disability combines with a subsequent industrial injury to produce a current disability of seventy percent (70%) or more.  The idea behind SIF cases is for the State to pay handicapped workers who suffer a subsequent industrial injury.  The employer is insulated from liability and thus they are encouraged to hire handicapped or disabled workers.

Specifically, SIF cases provide additional benefits under specified circumstances when an employee with a prior disability suffers a subsequent workplace injury.  The SIF provides compensation “for the remainder of the combined permanent disability existing after the last injury” (§ 4751)  less the amount of all benefits received by the employee on account of the preexisting disability (§ 4753).  The payments come from the Subsequent Injuries Benefits Trust Fund (SIF), a state supervised trust funded by surcharges imposed upon employers in proportion to their payrolls (§§ 62.5, subds. (d), (e), 4751 et seq.).  Thus, for the most serious injuries, the SIF allows the employee to obtain compensation commensurate with his or her overall disability without making the employer liable for more than the amount due for the most recent industrial injury.  The purpose of this provision, is to encourage hiring and retention of disabled workers.  (State of California v. Ind. Acc. Com. (1957) 147 Cal.App.2d 818, 822, disapproved on other grounds by Subsequent Injuries Fund v. Industrial Acc. Com. (1961) 56 Cal.2d 842, 846.)

SIF cases are governed by Labor Code Section 4751 which provides:

If an employee who is permanently partially disabled receives a subsequent compensable injury resulting in additional permanent partial disability so that the degree of disability caused by the combination of both disabilities is greater than that which would have resulted from the subsequent injury alone, and the combined effect of the last injury and the previous disability or impairment is a permanent disability equal to 70 percent or more of total, he shall be paid in addition to the compensation due under this code for the permanent partial disability caused by the last injury compensation for the remainder of the combined permanent disability existing after the last injury as provided in this article; provided, that either (a) the previous disability or impairment affected a hand, an arm, a foot, a leg, or an eye, and the permanent disability resulting from the subsequent injury affects the opposite and corresponding member, and such latter permanent disability, when considered alone and without regard to, or adjustment for, the occupation or age of the employee, is equal to 5 percent or more of total, or (b) the permanent disability resulting from the subsequent injury, when considered alone and without regard to or adjustment for the occupation or the age of the employee, is equal to 35 percent or more of total.

The 5% “Opposite and Corresponding” Member Requirement

For the 5% opposite and corresponding member criteria, the subsequent injury must only affect the opposite and corresponding member; it need not injure that member directly.  This was detailed in the case of Hard v. WCAB (1974) 2 CWCR 48. In the Hardcase the applicant had lost his left leg prior to the industrial injury.  The industrial injury involved a back injury that caused problems into the applicant’s right leg.  The WCAB panel held “applicant qualifies for subsequent injuries fund benefits because the back injury affected the right leg which is the opposite and corresponding member to the previously impaired left leg.”  See also: Gillispie v. Plastech (SIBTF) (2010) 38 CWCR 304 (WCAB) wherein the WCAB held that LC Section 4751 requires only that the subsequent injury “affect the opposite and corresponding member” (such as radicular sx’s in the leg as result of a back injury); it does not require that the opposite member have pathology or be injured.

The “Opposite and Corresponding” requirement is not limited to extremities.  In SIF v. IAC (Hanson)(1963) 217 Cal. App. 2d 322,  on May 28, 1959, the applicant, Bruce S. Hanson, was injured in an automobile accident.  The major effect of this industrial injury was to accelerate an existing diabetic retinitis to produce blindness of the right eye.  Prior to the injury and as a result of the same disease process, applicant had already suffered practically complete loss of vision in the left eye. Here the eye injuries were Opposite and Corresponding members. A similar case was SIF v. IAC (Patterson) 1952 39 Cal.2d 83. In Patterson the subsequent industrial right eye injury rated at 26% PD.  When combined with the pre-existing left eye injury, SIF liability was present.

The 5% disability to the opposite and corresponding member does not have to be completely within the injured member. For example, if the subsequent industrial injury involves the neck and arm, then the arm injury need not rate 5% as long as the neck combined with the arm combine to produce a 5% disability. In addition to not needing a subsequent injury causing a 5% disability in the opposite and corresponding member, the subsequent injury  need only affect the opposite and corresponding member and cause an overall disability of 5% or more. SIF v. WCAB (Post) (1976) 41 CCC 436.

The 35% threshold

The 35% threshold is calculated before adjustment for occupation and age. The DFEC modifier must also be factored in when determining the rating of the subsequent injury before adjustment for occupation and age. The plain and unambiguous language of LC 4751 excludes only adjustment for age and occupation. Since a WPI determination does not consider work disablement, and only considers the impact of an injury on activities of daily living, for the permanent disability determination in LC 4751 to be relevant to work disablement, the DFEC adjustment must be included. There are conflicting panel decisions from the WCAB as to whether the DFEC modifier is considered in the 35% threshold. Khandikian vs. SIBTF (2015) ADJ9150217 (Van Nuys) states that you do consider the DFEC in determining whether the 35% threshold is met, whereas a WCAB Panel in Malen v. Kitchen Works (2011) 2011 Cal.Wrk.Comp. P.D. LEXIS 84 approved the determination that when calculating the permanent disability from a subsequent injury, the industrial disability must be considered before adjustment for DFEC.

The Pre-existing Disability

As quoted in Escobedo v. Marshalls (2005) 70 CCC 604, 19 [en banc], “…the chief requirement for SIF benefits is that the condition must have been ‘labor disabling’ prior to the occurrence of the subsequent industrial injury. (Ferguson v. Industrial Acc. Com.(1958) 50 Cal.2d 469, 477 [326 P.2d 145]23 CCC 108]; Franklin v. WCAB 79 Cal.App.3d at pp. 237-238.)”

The Pre-existing disability for SIF purposes must have been present at the time of the subsequent industrial injury. Under the 1957 Bachrach case (SIF v. IAC (Bachrach)) 147 Cal. App. 22 818 , the existence of a non-disabling pathological condition is not sufficient to justify entitlement to SIF benefits. And per Franklin v. WCAB (1978) 79 Cal. App.3rd 224, a retroactive prophylactic work restriction will not support SIF liability. Further an SIF applicant cannot rely upon a retroactive assignment of disability in the absence of contemporaneous evidence to meet applicant’s burden of proof (see opinion and order denying petition for reconsideration in ADJ3447817(SJO 0260464).
The pre-existing condition must have been labor disabling, but that has been defined by the Courts as any condition that would be ratable if it had been caused by an industrial injury. To be entitled to SIBTF benefits, applicant’s prior permanent disability need not have caused actual earnings loss; it must simply be a disability for which partial permanent could be made if it were industrial. In Brown v.WCAB & SIF 36 CCC 627 (1971), at page 9 of the Lexis cite, the Court stated: “Although the prior disability need not be reflected in the form of loss of earnings, if it is not, it must be of a kind upon which an award for partial permanent disabilities could be made had it been industrially caused. This is necessary to distinguish it from a “lighting up” aggravation, or acceleration of the pre-existing physical condition where the employer is to be held liable for the whole.”(36 CCC 635).
Current AMA ratings under the 2005 PDRS will satisfy the pre-existing PD requirement as the 2005 schedule for rating permanent disability is prima facie evidence of the percentage of permanent disability which must be followed unless it has been successfully rebutted. (Almarez/Guzman II 74 Cal.Comp. Cases at 1103-1104; affirmed Milpitas Unified School District v. WCAB (2010) 187 Cal.Ap. 4th 808). Thus if the applicant shows a disability under the AMA guides, SIBFT may choose to offer evidence to rebut the rating under the AMA guides. However, in all cases the applicant carries the burden to establish that prior to the subsequent injury the applicant had a pre-existing labor disabling condition upon which an award of permanent disability could have been based.
In the case of multiple prior WCAB awards of permanent disability, the prior awards are simply added without dilution through the use of either the Multiple Disabilities Table (MDT) from the 1997 PDRS or the Combined Values Chart (CVC) from the 2005 PDRS. Labor Code Section 4751 refers to “combined disability, and ordinarily the MDT and the CVC are used to combine disabilities. However neither applies where there are multiple disabilities. The MDT and CVC are both only applicable to combine disabilities from one injury to multiple body parts of the body in order to avoid “pyramiding” and to avoid exceeding the 100% limit for one injury.  This concept is discussed in the 5/18/11 Notice of Intention to Recind WCJ’s Decision and Return Matter to Trial Level for Further Development of Medical Record in ADJ3143756//ADJ317043 signed by Ronnie G. Caplane with Alfonso J. Moresi and Frank M. Brass concurring.

How SIF awards relate to SSDI benefits

Under POMS Section: DI 52120.030, the SSA sets out their rules for Offsets In SIF cases. Under this section, the basic WC payment is offsettable, however, the additional payments which are made from the Subsequent Injuries Fund are not offsettable. Reverse offset applies to SIF payments.

SIF Credits

SIF Credits are governed by California Labor Code Section 4753 which provides:

California Labor Code Section 4753

Such additional compensation is not in addition to but shall be reduced to the extent of any monetary payments received by the employee, from any source whatsoever, for or on account of such preexisting disability or impairment, except as to payments being made to the employee or to which he is entitled as a pension or other compensation for disability incurred in service in the armed forces of the United States, and except as to payments being made to him or to which he is entitled as assistance under the provisions of Chapter2 (commencing with Section 11200), Chapter 3 (commencing with Section 12000), Chapter 4 (commencing with Section 12500), Chapter 5(commencing with Section 13000), or Chapter 6 (commencing with Section 13500) of Part 3, or Part 5 (commencing with Section 17000),of Division 9 of the Welfare and Institutions Code, and excluding from such monetary payments received by the employee for or on account of such preexisting disability or impairment a sum equal to all sums reasonably and necessarily expended by the employee for or on account of attorney’s fees, costs and expenses incidental to the recovery of such monetary payments. All cases under this section and under Section 4751 shall be governed by the terms of this section and Section 4751 as in effect on the date of the particular subsequent injury.

SIF is not entitled to Credit for Veteran’s Benefits//Service Connected Disabilities. In Webineer v. WCAB (SIF) (1975) 40 CCC 774 – , the Subsequent Injuries Fund was entitled to a credit for payments made to an injured employee under a Veterans Administration pension and as Social Security disability benefits only to the extent to which these payments were for a non-service connected disability which pre-existed the industrial injury. [See also Hanna, California Law of Employee Injuries and Workmen’s Compensation, Vol. 1, § 9.05[4][a].]

SIF is entitled to Credit for SSDI benefits for the percentage of SSDI that is related to the pre-existing PD. The formula is (100%-Comp. PD= % x SSDI benefits = offset). The SSDI credit will end once the worker reaches retirement age and the SSDI benefit converts to retirement benefits. Calculating the Social Security credit can be rather complex. To properly assess the credit four things need to be known: 1. The date of entitlement to SSDI benefits and the beginning date of these benefits; 2. Dates and amount of changes in monthly SSDI benefits after deductions; 3.If SSDI benefits have been terminated, the date reason for the termination must be known; and finally 4 The date of entitlement of Retirement. This information should be obtained from the Social Security Administration. We have seen the information provided on SSA form WNPSC-3070E (9/07).

Statute of Limitations for SIBTF Cases
There is no statute of limitations that directly applies to SIBTF cases. The SIBTF application must be filed within a reasonable time after an applicant knows or reasonably should know that there is a substantial likelihood that he or she has a claim for such benefits. If the SIBTF claim is filed within the five year period under Labor Code Section 5410, it is timely filed (although the five year limitation period described in section 5410 does not apply to claims for SIBTF benefits).The issue is more complex when the SIBTF application is filed more than 5 years after the date of  injury. SIBTF cases are often very complex and the filing of an SIBTF application within a reasonable time of a WCAB finding on the issue of permanent disability will be timely if your case is complex and the applicant could not reasonably know there was a substantial likelihood that there was a viable SIF claim before the 5 year mark in LC 5410. The California Supreme Court issued a number of dispositions in companion cases addressing this issue. It is important to read Subsequent Injuries Fund v. WCAB (Talcott) (1970) 2 Cal.3d 56 [35 CCC 80] together with Subsequent Injuries Fund v. WCAB (Baca)(1970) 2 Cal.3d 74 [35 CCC 94]. The Talcott court held: “That where, prior to the expiration of five years form the date of injury, an applicant does not know and could not reasonably be deemed to know that there will be substantial likelihood he will become entitled to subsequent injuries benefits, his application against the Fund will not be barred – even if he has applied for normal benefits against his employer – if he filed a proceeding against the Fund within a reasonable time after he learns from the Board’s findings on the issue of permanent disability that the Fund has probable liability.”. In Baca, the SIF claim was barred as there was a Petition to Reopen (and thus a WCAB finding on PD) and the applicant did not file the SIF case within a reasonable time of the WCAB finding on PD. If there is a petition to reopen filed and there is any chance of an SIF case, then the SIF case should be filed at the time of the Petition to Reopen or certainly within the 5 year period under LC 5410 or it risks being barred under Baca.
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