BlogUncategorizedStructured Settlements And Workers Compensation

Structured Settlements And Workers Compensation


Structured settlements have become a popular way for injured workers to receive compensation and fund their long-term care after workplace accidents. Rather than a simple lump-sum payment, structured settlements provide customized schedules of tax-free payments over time through annuities. This guarantees injured parties steady income for life’s uncertainties ahead and helps resolve workers’ compensation cases for all parties.

At Fairfield Funding, structured settlements are our specialty. We’ve handled over 5,000 workers’ compensation cases, designing tailored solutions for injured employees across the country. Our team of financial experts makes the entire structured settlement process transparent, convenient, and hassle-free while maximizing value for each client. We never forget that each case represents an injured worker hoping to move forward with their life.

Overview of Structured Settlements

A structured settlement provides customized compensation through scheduled periodic payments, usually funded by an annuity purchased from a highly-rated life insurance company. While the structure of payments and timing varies case-by-case, workers compensation settlement payments typically consist of:

  • Lifetime income to replace lost wages
  • Upfront lump sum payments to cover immediate expenses
  • Future lump sum settlement payments to fund predictable costs like medical procedures

Rather than handling these financial responsibilities alone in a vacuum, injured workers can rely on guaranteed income through an annuity they don’t have to manage or invest on their own.

Workers Compensation Benefits

Here are some major benefits of a structured settlement annuity for the workers:

Guaranteed Income

The primary advantage offered by these structured payments is income certainty. Injured workers face uncertain futures filled with challenges. By providing guaranteed tax-free payments tailored to the claimant’s needs, structured settlements provide injured workers with a fixed financial foundation they can actually rely on.


For example, structure recipients know they will receive a predictable amount of wage replacement income each month for the rest of their lives. These scheduling payments remain rock-solid regardless of fluctuations in the stock market or interest rates.

Tax Benefits

Another major perk is that structured settlement payments are completely tax-free under federal law. So not only does the income itself provide for living essentials and medical care, injured workers don’t have to worry about deductions from taxes eroding their purchasing power.


Structured settlements can be carefully adapted to each person’s distinct financial needs now and in the coming decades. For instance, a lifetime weekly wage replacement stipend provides basic living essentials. Significant lump sums spaced years apart offer flexibility to purchase vehicles, assist loved ones, or adapt housing needs for developing medical issues.

Fairfield Funding’s structured settlement consultants work closely with every client to understand their health challenges, family obligations, and lifestyle to create CUSTOM long-term payment schedules.

Cases We Dealt With – Structured Settlements in Workers’ Compensation

Structured settlements have become commonly utilized to resolve workers’ compensation cases involving long-term or permanent disabilities. In fact, as per the National Academy of Social Insurance‘s most recent data, 136 million workers had workers’ comp insurance coverage in the year 2020.

They provide an ideal solution for both injured workers and insurance carriers when an employee can no longer perform their occupational duties. The worker receives financial stability and independence. The carrier can definitively close out the claim with minimal long-term liability through a lump sum payment to fund the annuity.

Some specific applications include:

Income Replacement

One of the greatest challenges front of mind is simply how to continue paying bills with long-term income loss. Missed paychecks can quickly spur severe financial distress. Structured settlements allow injured parties to configure a monthly or weekly payment schedule specifically replacing as much of their lost wages as desired.

Medical Expenses

Especially with permanent partial or total disabilities, high medical bills tend to persist even decades after the initial accident. Out-of-pocket costs for appointments, equipment, medication, and procedures add up. Structured settlements enable the set upkeep of funds earmarked exclusively for these compounding healthcare costs.

Future Costs

A lifetime disability comes with unpredictable needs like home healthcare, modifications to accommodate wheelchairs and even specialized vehicles. Rather than a fixed pay scale, structured payouts can flexibly include larger lump sum benchmarks timed to these inescapable costs.

Workers’ Compensation Medicare Set-Asides

For claimants on Medicare or expecting to enroll soon, Workers’ Compensation Medicare Set-Asides (WCMSAs) have become essential to comply with federal regulations protecting taxpayers and the Medicare system. WCMSAs can be seamlessly integrated into structured settlements as the “medical expense” portion alongside other income replacement needs.

Case Examples:

Michael, Construction Foreman

As a construction foreman, Michael oversaw numerous projects each week and took great pride in his work. While reviewing blueprints on an active job site, he took a devastating fall that resulted in permanent paralysis below the waist.

It quickly became clear Michael would never be able to manage rough terrain or properly supervise crews from a wheelchair. He required a motorized chair just to maneuver around his house. His structured settlement provided the following:

  • Weekly wage replacement matching his lost paychecks based on his monthly income tax returns.
  • An upfront $50,000 lump sum to immediately adapt his home for wheelchair access with widened halls, ramps, and an exterior lift.
  • A guaranteed lump sum of $35,000 every 5 years to replace his wheelchair when needed.
  • Another lump sum on his 65th birthday to purchase a wheelchair-accessible van.

Jennifer, Food Processing Worker

A machine abruptly malfunctioned at the poultry plant Jennifer worked at, permanently damaging nerves in her dominant hand. After realizing she would never regain enough manual dexterity to safely resume her job operating industrial cutting equipment, her employer’s workers’ comp insurance carrier approached Fairfield Funding to explore settlement options.

Working closely with Jennifer, Fairfield Funding structured her settlement to include:

  • Ongoing lifetime payments matching 75% of her average monthly income based on her W-2s
  • A $15,000 upfront payment to adapt her vehicle for hand controls rather than foot pedals
  • Another $12,000 vehicle adaptation payment in 10 years
  • A separate professionally managed account exclusively earmarked for any medical costs related to her hand injury expected over her lifespan


If you or a loved one has suffered a workplace injury expected to impact many years of income security and health, a structured settlement through Fairfield Funding delivers customized lifetime advantages unavailable otherwise. Compared to conventional lump sum settlements our solutions offer injured workers of all backgrounds superior financial guarantees, tax minimization, versatile payment options, and lifetime support services from our compassionate, licensed experts. Reach out today to discover how structured settlements can provide the stability you deserve after an on-the-job tragedy alters your path. We see each case as writing the next chapter of your life story by securing it financially forever.

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