Family Law

Effect of Workers' Compensation on Child Support

By Amy Castillo, J.D., University of Minnesota School of Law
If you're injured on the job and awarded workers' compensation, how will that affect your child support obligation?

If you receive workers’ compensation after sustaining an injury on the job, you may find that these funds have a significant effect on the way you and your spouse divide up your assets and calculate child support in a divorce.

What Is Workers’ Compensation?

Workers’ compensation (or workers’ comp) is money paid to an employee who suffers an on-the-job injury. To be eligible, the employee’s injuries have to be related to employment. Injuries also have to be sustained while the employee was acting within the scope of existing laws and company policies. Generally speaking, employees who are injured while under the influence of alcohol or drugs are not eligible for workers’ comp. For example:

  • If an unsecured file cabinet falls over during work hours and injures an employee who’s reorganizing files at the express order of a supervisor, the employee is likely to receive workers’ comp.
  • If an employee comes into the office after normal business hours to pick up personal items, is intoxicated, and is injured in a fall, the employee may not receive workers’ comp.

If you’re awarded workers’ comp, the payment you receive is normally a replacement for a personal injury claim you might otherwise have had against your employer or your employer’s insurance policy.

The Difference Between Marital and Separate Property

For the most part, marital property includes all money, from whatever source, that you earn or acquire while you’re still married. This can include not only wages and bonuses, but other sources of income, like appreciation of assets, pension and retirement accounts, and rental income. In a divorce, you will have to divide marital assets with your spouse (either equitably in an equitable distribution state or evenly in a community property state), and your total assets will play a part in determining which parent has to pay child support and in what amount.

On the other hand, separate property is money that you earn or obtain before or after you’re divorced, and it is not subject to division in your divorce.

The key to understanding how your workers’ comp award will be viewed by divorce judges is the nature and timing of the award. A general rule of thumb is that if you sustain an injury and you’re awarded workers’ comp while you’re married, you’ll have to share those funds with your spouse. But if you're injured before or after a marriage, the funds belong to you and you alone.

Are There Different Kinds of Workers’ Comp?

There are several categories of workers’ comp, although different courts in different states may treat workers’ comp money differently:

  • Workers’ comp may be treated the same way as if the employee had filed and won a personal injury lawsuit against the employer.
  • Workers’ comp may be viewed as pay for a disability.
  • Workers’ comp may be regarded as a replacement for wages the employee would have earned if the injury hadn’t happened at all.

How Does My Worker's Comp Award Factor Into My Divorce?

In terms of how your workers’ comp award will affect your divorce and how you and your spouse will divide your assets, a lot depends on the nature of your workers’ comp award and the state where you’re getting divorced. For example:

  • If you live in a state where workers’ comp is treated as a personal injury award, then courts may treat your workers’ comp in a couple of different ways:
    • The parts of your workers’ comp award that compensate you for lost wages and medical expenses while you’re married are considered marital property.
    • The parts of your workers’ comp award that compensate you for lost wages and medical expenses before or after your marriage are considered non-marital property.
  • If you live in a state where workers’ comp is treated like pay for a disability, then divorce courts will treat the money you receive while you’re married as marital property, but the money you receive after the marriage is entirely your own.
  • If you live in a state where workers’ comp is treated as a replacement for the wages you lost due to injury, then the money you receive while you’re married is marital property. However, the workers’ comp money you receive before or after your divorce is non-marital property that you don’t have to share.

Workers’ Compensation and Child Support

In most states, even if a workers' comp award is separate property, it's considered income for purposes of calculating child support. Although injuries may prevent parents from working in their normal occupations, parents can't simply stop paying for their children’s basic needs. As a result, any workers’ comp money you (or your spouse) collect can be included in the mathematical formula judges use to decide how much child support each spouse is responsible for paying.

If a parent fails to pay child support, then that parent’s workers’ comp income can be garnished to pay for overdue support. If a parent is receiving workers’ comp and is making less-than-normal earnings, that parent can submit a motion (written request) to the court asking for a reduction in child support. Parents in this situation should file the necessary paperwork as soon as possible, to avoid falling into arrears.

If you have more questions about how workers’ comp may affect your divorce or child custody case, contact an experienced family law attorney as soon as possible.

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