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1. Purpose and Scope. This Part of the LHWCA PM discusses the Special Fund created under the provisions of section 44 of the Act. By establishment of the Special Fund, Congress intended to provide non-government money for a variety of uses, to be administered under the direction of the Secretary of Labor and, by delegation, the DLHWC. Chapter 6-200 provides an overview of the uses of the Special Fund. Chapter 6-201 contains specific procedures for processing section 8(f) application for relief from the Special Fund. Chapter 6-202 contains procedures for processing cases for payment under section 18(b) of the Act where the employer and carrier are defunct. Chapter 6-203 contains procedures for processing payments from the Special Fund in cases where section 8(f) relief has been awarded by compensation order.
2. Authority and Purpose.
a. Legislative Authority for the Special Fund. The Special Fund was established in the U.S. Treasury by section 44 of the Act, to be administered by the Secretary of Labor. The Treasurer of the United States is the custodian of the Fund, and the monies and securities in the Fund are held in trust and are not the money or property of the United States. Disbursements are made from the Fund on the order of the Director, OWCP, acting for the Secretary. There is a separate Fund maintained under the District of Columbia Workmen's Compensation Act and administrated in the same way as the LHWCA Special Fund.
b. Purpose of the Special Fund. In establishing the Special Fund, Congress intended to relieve an individual EC of the burden of paying for the full compensation benefits due the employee who was previously partially disabled but was hired or retained by the EC, to share the burden of paying compensation in the event of an insolvency of an EC and to pay for certain rehabilitation services which are otherwise not available.
3. Sources.
a. The Act provides the following sources of money for the Special Fund:
(1) For the death of a covered employee having no eligible beneficiary, the EC is required to pay $5,000 (see section 44(c)(1)).
(2) Since an award for disability may be made after the death of an injured employee, if there are no statutory survivors, the balance of the award unaccrued and unpaid at the time of death shall be paid into the Fund (see section 8(d)(3) and Wilhilmina Wood v. Ingalls Shipbuilding, Incorporated, 28 BRBS 27 (1994)).
(3) An annual assessment against ECs (see section 44(c)(2)).
(4) All amounts collected as fines and penalties under the Act (e.g., for failure or delay in filing a report of injury, and failure or refusal to comply with safety rules and regulations).
b. Any payments made by the Special Fund are a lien upon the proceeds of any settlement obtained from or judgment rendered against a third person (see section 33(g)(3)).
c. All monies collected are made payable to the U.S. Department of Labor, Longshore Division and mailed to the National Office, DLHWC, for deposit in the Special Fund.
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