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Lump-sum payments do not hurt return to work: study

July 18, 2012

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Cambridge, MA – Lump-sum settlements may encourage workers to return to work after an injury, indicates a study from the Workers Compensation Research Institute.

For four years, researchers followed the employment experiences of 2,138 Michigan workers who received a lump-sum settlement in 2004. They found more injured workers returned to work than left work. Average employment increased from 25 percent at the time of the payment to 32 percent a year later, according to a WCRI press release. However, the same was not true for older workers, whose employment declined.

Seventy-eight percent of injured workers who received a lump sum did not change their employment status, meaning they stayed employed or unemployed. Of the workers whose status changed, 30 percent left work after receiving their settlement, and 19 percent of those who were not employed found work, the release stated.

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