October 11, 2022

Evaluating applications for workers' compensation benefit "reclassification" pursuant to Workers' Compensation Law §35(3)

Workers' Compensation Law §35(3) provides for "extreme hardship re-determinations" in cases where the loss of wage-earning capacity is greater than seventy-five percent. In such situations a claimant may request, within the year prior to the scheduled exhaustion of indemnity benefits, that the Workers' Compensation Board reclassify the claimant to "permanent total disability". 

Considering an appeal from a decision of the Workers' Compensation Board [Board] which ruled that Claimant met the requirements for extreme hardship reclassification pursuant to Workers' Compensation Law §35(3), the Appellate Division observed that the Claimant for workers' compensation benefits had established a workers' compensation claim for injuries to his right shoulder and low back.

Shortly before the expiration of those indemnity benefits, however, Claimant filed a timely "extreme hardship re-determination request (C-35 form)" pursuant to Workers' Compensation Law §35(3). A Workers' Compensation Law Judge granted Claimant's application and reclassified Claimant as permanent total disability due to factors reflecting extreme hardship. The Board affirmed the Judge's decision and the Claimant's employer and its workers' compensation carrier appealed the Board's ruling.

The Appellate Division sustained the Board's determination that Claimant had demonstrated extreme hardship entitling him to reclassification, noting that the Board had considered Claimant's [1] monthly income, which included Social Security disability benefits and other imputed income derived from public assistance programs, [2] his detailed monthly expenses, [3] the fact Claimant's monthly expenses exceed his monthly income did not mandate a finding of extreme hardship, and [4] considered other relevant factors, such as claimant's education and employment perspectives.

Finding that substantial evidence supported the Board's finding that, given the notable shortfall of Claimant's financial ability to meet his monthly obligations once his workers' compensation indemnity benefits were discontinued, and considering Claimant's inability to obtain new employment in order to produce additional income, the Appellate Division opined that Claimant "demonstrated extreme hardship warranting  reclassification pursuant to Workers' Compensation Law §35(3)" by the Board.

Click HEREto access the Appellate Division's decision.

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