By: Wesley R. Moore, Esq.
time a claim settles, the “stip,” or stipulation and agreement, must be
executed by both the claimant and employer/insurer and submitted to the State
Board of Workers’ Compensation for approval. Whether the settlement is on a
liability or no-liability basis, stips always include “Hartman language”, which
is a provision that references the payment of Social Security Disability
benefits and allocates for the total settlement amount over the claimant’s
projected life expectancy. Because Federal law contains an “off-set” for
workers’ compensation income benefits against Social Security Disability
benefits, the language is beneficial for the employee.
Although Georgia law does not treat workers’ compensation benefits as taxable income, Social Security Disability benefits are subject to taxation. When a claimant’s receipt of workers’ compensation and Social Security Disability benefits rises above the 80% threshold, the excess amount will be taxed. In essence, the Hartman language can impact the taxation of a claimant’s social security benefits and cause income which is not usually taxable subject to taxation.
For example, if a claim settles for $10,000 and the claimant has a 10 year life expectancy, the Hartman language will reflect the payment of approximately $19.23 per week over 520 weeks.