By: Leonardo Lampret, Associate Attorney
Workers’ Compensation Law § 35(3) offers claimants with a loss of wage-earning capacity (LWEC) greater than 75% the opportunity to request reclassification to permanent total disability (PTD) or total industrial disability due to “extreme hardship.” This request must be made within one year prior to the scheduled exhaustion of indemnity benefits under WCL § 15(3)(w). Although the statute provides a safety net, the burden of proof is on the claimant, and the standard for qualifying is high.
For carriers, it is essential to understand how the Board evaluates these applications. The determination focuses heavily on the claimant’s financial circumstances. The Board will consider monthly household income (including income from a spouse or other household members), assets, and a full breakdown of expenses—such as housing, transportation, credit cards, food, utilities, child care, taxes, student loans, and other fixed or discretionary costs. Notably, the presence of spousal or family support is a relevant factor.
The Board also examines vocational factors, including the claimant’s education, training, and ability to secure gainful employment. A high LWEC rating alone is not sufficient—if there is residual earning capacity, the Board may deny reclassification.
From the carrier’s perspective, defending against these applications involves obtaining detailed financial disclosures and thoroughly reviewing income sources and expense records. Surveillance, labor market attachments, or vocational assessments can be critical in showing that the claimant retains some ability to work or that the financial hardship is not extraordinary.
Understanding the criteria under WCL § 35(3) enables carriers to identify weak claims and respond strategically, potentially avoiding unnecessary lifetime indemnity exposure.