Case # G0026199
Matter of Independent Group Home Living Program, Inc.
2019 NY Wrk. Comp. G0026199
By: Board Members Crain, Foster, Stasko
The carrier requests review of the Workers' Compensation Law Judge (WCLJ) decision filed on September 5, 2018. The claimant filed a rebuttal.
The issues presented for administrative review are:
- Does the April 10, 2017 amendment to Workers' Compensation Law (WCL) §35(3) that changed the minimum Loss of Wage Earning Capacity eligible for extreme hardship review from 80% to 75% apply to permanent partial disability determinations made before the effective date of the statutory amendment; and,
- Whether the claimant has met the requirements, including demonstration of extreme financial hardship, to qualify for reclassification under WCL §35(3).
On January 30, 2009, the claimant was working as a direct-care support counselor when she sustained a work-related injury while attempting to assist an agitated resident.
The case was established for injuries to the neck, back and right shoulder. The claimant's average weekly wage was set at $614.50.
At a hearing on January 5, 2011, on the record, the claimant agreed to a finding of 74.45% permanent partial disability and a 79% loss of wage earning capacity (LWEC) and testified that she understood this entitled her to benefits at $305 per week for 425 weeks. The January 10, 2011 decision incorporated this agreement. The case was marked no further action.
These benefits are set to expire on March 5, 2019, 425 weeks after the January 10, 2011 decision finding a permanent partial disability and LWEC of 79%.
On April 19, 2018, the claimant filed an RFA-1LC (Request for Further Action by Legal Counsel) form and a C-35 (Extreme Hardship Redetermination Request) form requesting a hearing on the issue of an extreme hardship redetermination.
A hearing was held on July 10, 2018. The claimant testified. The WCLJ found the claimant currently receives $861.00 in monthly Social Security Retirement Benefits and $1,389.98 in monthly widow's retirement benefits, in addition to $1,321.67 monthly Workers' Compensation Benefits ($305.00 per week multiplied by 52 weeks and divided by 12 months), for a total of $3,572.65 in monthly income.
At the next hearing on August 30, 2018, the claimant testified that she currently pays $1,930.00 a month in rent in her apartment complex and that her rent is increasing to $2077 in October 2018. She also testified that she pays a surcharge for amenities in the apartment complex of $275 that include the use of a clubhouse, gym, three pools and a tennis court. The claimant also provided testimony regarding her other expenses, which include cable plus a land-line ($175), cell phone ($100), gas for heat ($125), electricity ($100), medical co-pays and prescriptions ($244), hair ($100), insurance for car and apartment ($79). These expenses were documented by bills and receipts.
The WLCJ found that the claimant met the definition of "extreme hardship" for reclassification and continuing benefits. The WCLJ awarded compensation from January 6, 2011 to August 31, 2018 at a permanent partial disability rate of $305.00 per week and directed the carrier to continue payment at the permanent partial disability rate of $305.00 per week. The carrier's representative noted his exception to the WCLJ's finding on the record.
In an application for review filed on October 3, 2018, the carrier contends that claimant is ineligible for an extreme hardship application because her LWEC is beneath the 80% threshold in place in 2011 when the claimant was found to have a permanent partial disability. The carrier further contends that claimant's financial circumstances do not warrant a finding of extreme hardship.
This case concerns application of WCL §35(3). In 2011, when the claimant was classified and her LWEC was determined, the statute read: "Extreme hardship redetermination. In cases where the loss of wage-earning capacity is greater than eighty percent, a claimant may request, within the year prior to the scheduled exhaustion of indemnity benefits under paragraph w of subdivision three of section fifteen of this article, that the board reclassify the claimant to permanent total disability or total industrial disability due to factors reflecting extreme hardship" [emphasis added]. Thereafter, the statute was amended to change "eighty percent" to "seventy-five percent." The amendment to the statute was effective on April 10, 2017.
Nothing in the language of WCL §35(3) indicates legislative intent that the decrease in LWEC thresholds for extreme hardship determinations should not apply to applications received on or after the statute's effective date, April 10, 2017. A statute is not retroactive when made to apply to future transactions merely because such transactions relate to and are founded upon antecedent events' " (Raynor v. Landmark Chrysler, 18 N.Y.3d 48,  citations omitted). Here, WCL §35(3) was amended in 2017 to reduce the threshold whereby a claimant may make an application for an extreme hardship redetermination when such application is made "within the year prior to the scheduled exhaustion of indemnity benefits under paragraph w of subdivision three of section fifteen." The claimant made such an application on April 19, 2018, after the effective date of the statutory amendment and within one year of the scheduled exhaustion of her benefits in March of 2019. As stated by the Court of Appeals, "viewing the workers' compensation system broadly, '[t]he allocation of economic benefits and burdens has always been subject to adjustment' [and the] system 'designedly, has flexibility, much greater than that found in the more traditional forms of law.' Thus, it is not unusual that carriers or employers have had their burdens shifted or increased with relation to past industrial accidents" (American Economy v. State of New York, 30 N.Y.3d 136  citations omitted). Accordingly, even though the parties' agreement as to the claimant's LWEC in 2011 may have contemplated the threshold for extreme hardship determinations in existence on that date, the fact that the effective date of the statutory amendment pre-dates the date of claimant's eligibility to apply for an extreme hardship redetermination means that the 2017 threshold of seventy-five percent applies to the present case.
However, upon review of the claimant's application for redetermination, the Board Panel finds that she is ineligible for redetermination as she has not demonstrated extreme hardship.
Workers' Compensation Board Subject Number 046-938, dated April 26, 2017, discusses the standards that must be present in order to be eligible for reclassification due to factors reflecting extreme hardship. Specifically, the Subject Number provides:
Workers' Compensation Law § 35(3) provides that qualified injured workers may request reclassification to permanent total disability or total industrial disability due to factors reflecting extreme hardship. The governor's memorandum in support of the workers' compensation reform bill described the extreme hardship redetermination provision as one that "provides an exemption [from the PPD caps] for extreme financial hardship, while allowing judges to take into account factors in addition to claimants' income and other available resources" [emphasis added].
In order to determine whether or not the injured worker's circumstances meet the standard of an extreme hardship, the Board will consider the evidence listed in Form C-35 regarding the injured worker's income and monthly expenses (as well as any other factors listed in the injured worker's application for reclassification). Here, the claimant's monthly income without her workers' compensation award includes her social security retirement benefits and her husband's retirement income. These two sources of income generate a monthly total of $2250.98. Contrary to claimant's attorney's contention, the fact that claimant's expenses exceed her income or the fact that she lives in a part of the state that is expensive are not factors that are considered in an extreme hardship determination.
While the Workers' Compensation Law does not define "extreme hardship," it is noted that the language in WCL §35 (3) does not refer to a demonstration of "hardship" but rather uses the adjective "extreme" as a modifier. As set forth in the Merriam-Webster dictionary, "extreme" means: existing in a very high degree or exceeding the ordinary, usual, or expected. Thus, it appears that the Legislature clearly did not intend that the standard for reclassification be "hardship" alone, but rather, that a claimant must demonstrate financial hardship beyond the ordinary and existing in a very high degree. A claimant that is receiving a normal social security retirement plus her spouse's retirement income may not be characterized as experiencing financial hardship beyond what is ordinary, usual or expected for a retired person living on a fixed income. The fact that the claimant's expenses exceed her income does not change this analysis.
Therefore, the Board Panel finds, upon a review of the record and based upon a preponderance of the evidence, that the claimant is not entitled to an extreme hardship determination pursuant to WCL §35(3).
ACCORDINGLY, the WCLJ decision filed September 5, 2018, is REVERSED. No further benefits are due after March 5, 2019. The case is closed.