Chapter 3. Lump Sum Payments of California Labor Code >> Division 4. >> Part 3. >> Chapter 3.

At the time of making its award, or at any time thereafter, the appeals board, on its own motion either upon notice, or upon application of either party with due notice to the other, may commute the compensation payable under this division to a lump sum and order it to be paid forthwith or at some future time if any of the following conditions appear:
  (a) That such commutation is necessary for the protection of the person entitled thereto, or for the best interest of the applicant. In determining what is in the best interest of the applicant, the appeals board shall consider the general financial condition of the applicant, including but not limited to, the applicant's ability to live without periodic indemnity payments and to discharge debts incurred prior to the date of injury.
  (b) That commutation will avoid inequity and will not cause undue expense or hardship to the applicant.
  (c) That the employer has sold or otherwise disposed of the greater part of his assets or is about to do so.
  (d) That the employer is not a resident of this state.

Notwithstanding the provisions of Section 5100, the appeals board shall not commute the compensation payable under this division to a lump sum when such compensation is payable under Section 4751 of the Labor Code.

Notwithstanding the provisions of Section 5100, the appeals board shall not permit the commutation or settlement of prospective compensation or indemnity payments or other benefits to which the employee is entitled under vocational rehabilitation.

The amount of the lump sum shall be determined as follows:
  (a) If the injury causes temporary disability, the appeals board shall estimate the probable duration thereof and the probable amount of the temporary disability payments therefor, in accordance with Chapter 2 of Part 2 of this division, and shall fix the lump sum at the amount so determined.
  (b) If the injury causes permanent disability or death, the appeals board shall fix the total amount of the permanent disability payment or death benefit payable therefor in accordance with Chapter 2 of Part 2 of this division, and shall estimate the present value thereof, assuming interest at the rate of 3 percent per annum and disregarding the probability of the beneficiary's death in all cases except where the percentage of permanent disability is such as to entitle the beneficiary to a life pension, and then taking into consideration the probability of the beneficiary's death only in estimating the present value of such life pension.

The appeals board may order the lump sum paid directly to the injured employee or his dependents, or deposited with any savings bank or trust company authorized to transact business in this state, which agrees to accept the same as a deposit bearing interest; or the appeals board may order the lump sum deposited with the State Compensation Insurance Fund. Any lump sum so deposited, together with all interest derived therefrom, shall thereafter be held in trust for the injured employee, or in the event of his death, for his dependents. In the event of the employee's death, his dependents shall have no further recourse against the employer under this chapter.

Payments from the lump sum so deposited shall be made by the trustee only in the amounts and at the time fixed by order of the appeals board and until the lump sum and interest thereon are exhausted.

In the appointment of the trustee, preference may be given to the choice of the injured employee or his dependents.

Upon the payment of a lump sum, the employer shall present to the appeals board a proper receipt evidencing the same, executed either by the injured employee or his dependents, or by the trustee. The appeals board shall thereupon issue its certificate in proper form evidencing such payment. Such certificate, upon filing with the clerk of the superior court in which any judgment upon an award has been entered, operates as a satisfaction of the award and fully discharges the employer from any further liability on account thereof.

The appeals board shall, upon the request of the Director of Industrial Relations, where the employer is uninsured and the installments of compensation awarded are to be paid in the future, determine the present worth of the future payments, discounted at the rate of 3 percent per annum, and order the present worth paid into the Uninsured Employers Fund, which fund shall thereafter pay to the beneficiaries of the award the future payments as they become due.