Workers’ Compensation: Requesting A Lump Sum Commutation For Permanent Benefits

Arizona Injury Law Group

The law in Arizona requires that permanent benefits be paid on a monthly basis. The law does, however, give the Commissioner discretion to commute the awards to a lump sum, if requested. After you have been found to have a permanent disability and you have been awarded disability benefits, you may request that your monthly payments be commuted to a lump sum payment. Your request will only be considered after the award for permanent disability becomes final, or all the parties have waived their rights to appeal the award.

There are limitations on the jurisdiction of the ICA when considering a lump sum commutation request.

ARS Sec 23-1067A provides that the ICA may allow commutation for permanent partial scheduled awards to a lump sum not exceeding $25,000.00 with, or without, the insurance carrier’s consent.

For permanent partial unscheduled awards, ARS Sec 23-1067B provides that the lump sum commutation cannot exceed $150,000.00 and the carrier liable to pay the claim must consent to such a commutation.


The value of the commutation is determined on the day you file the request. The ICA will consider payments due to you and will subtract advances and payments made after your request. The value is then discounted at 0.06% per annum.


Work Injury Claim

Rule 22, Rules of Procedure Before the Industrial Commission, states that the circumstances of the case must be such that a lump sum commutation will place the injured worker in a better financial position or provide better opportunities for rehabilitation of the injured worker. Only if the computation is in the best interest of the injured worker and the facts demonstrate a reasonable basis for financial betterment or rehabilitation will the ICA grant a lump sum commutation request.

Granting a lump sum petition seems to be the exception, rather than the ruleThe bottom line is:  Will the lump sum generate more net income per month for the injured worker than what he/she is currently receiving? If the answer is No, the courts have refused to overturn a disapproval of the request for lump sum commutation.


The person applying for the commutation bears the burden of proving that the commutation will be in your best interest.


You can request all the forms that need to be completed from the ICA.

Upon request, the ICA will provide you with all the forms, which you will have to complete in full and you must include all the requested documentation. The ICA will ask an opinion from the carrier and if appropriate, your request will be presented to the Commissioners for their decision. After consideration the ICA will issue an award, either approving or disapproving your request. If denied, you have to protest the award within ten days, by filing a signed request for Hearing with the ICA. You will be notified when your hearing will take place before the Commissioners. Failure to protest the decision within ten days renders the decision final.

Take note: A lump sum commutation does not compromise your right to request to reopen your case in the future. Your right to reopen is based on a change in your physical condition. Should your case be reopened in the future, the amount of the lump sum will be taken into account when determining any future adjustments or compensation.


If your request for a lump sum commutation is denied, you are faced with going through Hearings and you might even end up presenting your case to the Arizona Court of Appeal. This is a very complex process and you will certainly need a lawyer to assist you. Rather get legal advice from an experienced lawyer with knowledge in this field, early on in the process. Succeeding with your request for a lump sum commutation on first application is much better than risking your request being denied.

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