The Subsequent Injuries Benefits Trust Fund pays additional compensation to workers who suffer an industrial injury that, when combined with pre-existing disabilities, causes permanent disability equal to 70 percent or more. (Labor Code, § 4751. ) Section 4753 requires this additional compensation to “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.” This reduction or “credit” preserves state resources by ensuring applicants receive benefits commensurate with their combined disabilities – no more, no less.

Nancy Vargas drove a bus for the Santa Barbara Metropolitan Transit District (district) for 25 years. She injured her foot in March of 2018 while stepping off the driver’s pedestal. Vargas settled her claim against the district in December of 2020. They stipulated the injury caused permanent disability of 26 percent and agreed on the amount of her weekly indemnity payments going forward.

Vargas applied for subsequent injury benefits from the Fund while her workers’ compensation case was pending. She listed pre-existing disabilities to her back, upper extremities, left knee, and right ankle. She disclosed filing one prior workers’ compensation case. Vargas confirmed she had applied for SSDI in January of 2018 and was currently receiving monthly SSDI payments of $940.

The Fund acknowledged Vargas qualified for benefits but claimed section 4753 credit for a significant portion of the Social Security Disability Insurance (SSDI) payments she began receiving after her latest injury.

The WCJ found the Fund “ha[d] not met their burden to show an entitlement to credit for social security disability award nor any other disability retirement benefit.” The Board denied the Fund’s petition for reconsideration, finding “section [4753] does not state that credit is absolute. [The Fund] would need to show that the monetary payment received is for or on account of such pre-existing disability or impairment. [It] did not show that in this case.” The Board noted Vargas’s award letter and subsequent SSDI statements “did not describe the basis of the benefit.” It concluded “[w]hat is before the court without assumptions does not establish credit and therefore no credit was awarded.”

The SIBTF filed a petition for review that challenges the Board’s decision. The Fund contends the Board erred by placing the burden of proof on the Fund to show Vargas received SSDI benefits “for or on account of” her pre-existing disabilities.

The Court of Appeal affirmed the WCAB in the published case of Subsequent Injuries Benefits Trust Fund v. Workers Comp. App. Bd. -B333633 (July 2024).

“We agree with the Board that the Fund must prove its entitlement to a credit for SSDI and other “monetary payments” received by applicants. The burden of proof in workers’ compensation proceedings “rests upon the party . . . holding the affirmative of the issue. (§ 5705.)”

“Applicants must initially show they are entitled to subsequent injury benefits under section 4751 by proving: (1) they were “permanently partially disabled” and (2) they “receive[d] a subsequent compensable injury resulting in additional permanent partial disability.”

“The Fund must then show it is entitled to reduce the applicant’s subsequent injury benefit under section 4753, and, if so, the “extent” it may reduce those payments. Both sides must meet their burden by a preponderance of the evidence.”