Workers’ Compensation Payments

Workers’ Compensation Payments. A. This type of income is defined as follows: 1. Workers’ Compensation (WC) payments are awarded to an injured employee and his/her survivor(s) under federal and state WC laws, such as the Longshoremen and Harbor Workers’ Compensation Act and may be made by a federal or state agency, an insurance company or an employer. B. This type of income is treated as follows: 1. The WC payment less any expenses incurred in obtaining the payment is counted as unearned income. a) Any portion of a WC payment or award that the authorizing or paying agency designates for medical, legal or other expenses attributable to obtaining the WC award is not income. b) If an individual alleges having incurred expenses that exceed the amounts designated for expenses, or to which no amount was designated, the normal rules pertaining to the expenses of obtaining income apply.