Workers' compensation benefits generally do not automatically include cost‑of‑living increases; any adjustment depends on the state's specific statutes, the type of benefit, and whether the claim is ongoing or settled.
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State statutes and regulations
Each state sets its own rules for workers' compensation. Some states, such as California and New York, provide periodic cost‑of‑living adjustments (COLAs) for temporary disability and wage‑replacement benefits, while others only adjust benefits when a new award is issued or when legislation changes.
Type of benefit matters
Temporary disability (TD) and temporary total disability (TTD) benefits are more likely to receive COLAs because they are paid on an ongoing basis. Permanent disability (PD) awards are often a lump‑sum or a fixed monthly amount that does not change unless the state enacts a retroactive COLA for all recipients.
Claim status and settlement
If a claim is settled with a lump‑sum payment, the recipient typically does not receive future COLAs. Ongoing monthly benefits, however, may be subject to adjustments if the state's law mandates them.
How adjustments are applied
When a COLA is required, the increase is usually calculated using the Consumer Price Index (CPI) or a similar inflation measure. The adjustment is applied to the benefit rate at the start of the next payment period, often annually.
What to do
Check your state's workers' compensation board or agency website for specific COLA provisions. If you're unsure, contact your claims adjuster or a workers' compensation attorney to confirm whether your benefits will be adjusted for inflation.