Office of Workers' Compensation Programs (OWCP)

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Division of Longshore and Harbor Workers' Compensation (DLHWC)

CHAPTER 3-500 — SETTLEMENTS

1. Purpose and Scope. This Chapter provides an introduction to settlements and commutations under the LHWCA and its extensions. Chapter 3-501 pertains to settlements under section 8(i) of the LHWCA. Chapter 3-502 covers commutations under section 9(g) of the LHWCA and section 2(b) of the DBA.
2. Policy. It is our policy to neither encourage nor discourage agreed settlements. It is the responsibility of the DD to insure that applications are complete, adequate, not procured by duress, and timely processed.
3. Section 8(i) Settlements.
   1. Settlement applications may be submitted solely for compensation, solely for medical benefits or for compensation and medical benefits combined.
   2. Settlement may be considered for any claim under the Act, including survivor benefits.
   3. Settlements may be "structured" so that payments will extend over the lifetime of the claimant with an annuity policy used to provide continuing payments.
4. Commutations Pursuant to LHWCA Section 9(g).
   1. Commutations are limited to death benefits for aliens or non-nationals of the United States, in the amount of 1/2 of the commuted future installments.
   2. An informal conference or formal hearing is not required to authorize a lump sum payment.
   3. A compensation order fixing the right of the beneficiary to compensation is required pursuant to section 702.142(d) of the regulations.
   4. All commutation calculations are made by the National Office.
   5. Commutation, pursuant to section 9(g), is mandatory upon request by the EC.
5. Commutations Pursuant to DBA Section 2(b).
   1. Commutations may be considered for permanent total disability, permanent partial disability under section 8(c)(21), or death of aliens or non-nationals of the United States. Payment is for 1/2 of the commuted amount of future installments.
   2. Payment of a lump sum does not release the EC of the responsibility to furnish future medical care.
   3. An informal conference or formal hearing is not required to authorize a lump sum payment.
   4. All commutation calculations are made by the National Office.
   5. Commutation, pursuant to DBA section 2(b), is mandatory upon request by the EC.