Compensation under the Subsequent Injuries Benefits Trust Fund (SIBTF)

Created in 1945, the Subsequent Injuries Benefits Trust Fund is a state supervised trust funded by surcharges imposed on employers in proportion to their payrolls (LC 62.5(f)(1)). The amount collected by the fund is paid to workers who have suffered serious injury and who are suffering from previous and serious permanent disabilities or physical impairments (LC 62.5(c)(1)).

The purpose of the fund is to encourage employers to hire disabled workers and to encourage disabled employees to seek employment. The fund encourages employers to hire disabled workers without fearing potential liability for the effects of previous disabilities or impairments. Thus, the fund allows the employee to obtain compensation equal to their overall disability without making the employer liable for more than the amount due for the most recent industrial injury. Employees are then compensated for any increased disability resulting from the combined effect of their prior disability and an industrial injury.

To receive benefits from the Subsequent Injuries Benefits Trust Fund, the employee must demonstrate qualifying criteria within the requirements of LC 4751. The burden of proof is on the employee to show the following:

1. a pre-existing permanent partial disability;
2. a subsequent compensable injury resulting in additional permanent partial disability

• • if the previous permanent partial disability affected a hand, an arm, a foot, a leg or an eye, the subsequent permanent disability must affect the opposite and corresponding member, and that subsequent permanent disability must equal 5 percent or more of the total disability, when considered alone and without regard to, or adjustment for, the occupation or age of the employee; or
  • the subsequent permanent disability must equal 35 percent or more of the total disability, when considered alone and without regard to, or adjustment for, the occupation or the age of the employee.

3. the combined pre-existing and subsequent permanent partial disability are greater than the subsequent permanent partial disability alone; and
4. the combined pre-existing and subsequent permanent partial disability are equal to 70 percent or more.

Once the threshold requirements are met, LC 4751 specifically states that the applicant “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 ….” (Todd v. SIBTF (2020) 85 CCC 576, 581-582 (appeals board en banc). If the record is not clear, the appeals board may order its development on those issues.

First, an employee must show that prior to the occurrence of the subsequent industrial injury, there existed a permanent partial disability. Without substantial evidence of a subsequent compensable injury, an employee is not entitled to benefits. The prior disability is measured as it existed at the time immediately preceding the subsequent industrial injury. A prior permanent disability award would satisfy that requirement but is not required. Medical evidence may be used to establish pre-existing disability. Although, it is not sufficient just to show pre-existing pathology.

The prior disability must be the type for which an award for partial permanent disability could be made had it been industrially caused. However, an employee may not receive benefits from the fund based on an asymptomatic disease process that was not labor disabling before the industrial injury.

The employee must then demonstrate that the permanent disability from the subsequent industrial injury either: (1) produces 35 percent disability or more; or (2) 5 percent disability or more to an “opposite and corresponding member.” The 35 percent and 5 percent thresholds must be met before adjustment for age or occupation. LC 4751 allows for DFEC adjustment as the Legislature excluded only adjustments for age and occupation. For injuries occurring on or after Jan. 1, 2013, disabilities are adjusted by the 1.4 modifier.

Additionally, the pre-existing condition must have been “labor disabling” before the occurrence of the subsequent industrial injury. If it is established that the employee has a prior permanent partial disability for the purposes of LC 4751, the employee must prove that the degree of disability caused by the combination of both disabilities is greater than what would have resulted from the subsequent injury alone. Therefore, if the employer is liable for the entire disability, the fund is not liable.

Finally, the employee must demonstrate that the combined effect of the prior disability and the subsequent injury are equal to a permanent disability of 70 percent or greater. It is the percentage of the pre-existing disability at the time of the last industrial injury that determines whether there is a total disability of 70 percent. The fund has no liability if there is a finding by the appeals board that the combined disability is less than 70 percent. The fund is also not liable for the progression of a pre-existing disability after the subsequent industrial injury.

Whenever it appears likely that benefits may be payable from SIBTF, a claim against the fund must be made by filing an application pursuant to CCR 10462. The application must include the date of and the nature of the industrial injury, and all the factors of disability alleged to have existed before the injury (CCR 10462(a)). A copy of the application may be obtained at the DWC website at: https://www.dir.ca.gov/dwc/forms.html.

The Labor Code does not provide a statute of limitations for filing a claim against the fund. In SIF v. WCAB (Talcott), the California Supreme Court held that an employee was not necessarily limited to five years from the date of injury as required by LC 5410 because if LC 5410 applied to claims against the fund, an employee may lose their cause of action even before the board is able to determine the facts on which the fund’s liability is predicated. So, Talcott held that the statute of limitations for a claim against the fund is based solely on a reasonable standard.

SIBTF cases can be confusing. If the injured worker meets the qualifying criteria and can show “labor-disabling” impairment that pre-dated the industrial injury, if the combination results in at least 70% disability the injured worker is likely entitled to additional benefits under SIBTF. The attorneys at Mastagni Holstedt, APC have decades of experience in navigating the complexities of the workers’ compensation system and pursuing strategies for associated SIBTF claims.