November 04,2015

Impact of Retirement on Workers’ Compensation Benefits

The Supreme Court of Virginia, in a decision dated October 29, 2015, held that a claimant’s post-injury retirement did not preclude an award of temporary total disability benefits when the claimant was placed on total disability after his retirement.  See McKellar v. Northrop Grumman Shipbuilding, Inc., Record No. 140999 (October 29, 2015).  The Court held that the proper standard to apply in cases involving temporary total disability under Va. Code § 65.2-500 (1950 as amended) was loss of earning capacity.  The Court further indicated this standard differ from the economic loss standard applied in cases involving temporary partial disability under Va. Code § 65.2-502 (1950 as amended).  As the injured worker in McKellar suffered a loss of earning capacity due to his total disability, the Court held he was entitled to temporary total disability benefits even though he did not suffer an economic loss due to his retirement.

Based on McKellar, the impact of a claimant’s retirement on his or her entitlement to lost wage benefits will depend on whether the claimant is seeking temporary total disability benefits or temporary partial disability benefits.  If temporary total, a claimant’s retirement will not bar lost wage benefits.  If temporary partial, a claimant’s retirement may bar lost wage benefits if the claimant has not adequately marketed his or her residual work capacity.