Most New Jersey workers' compensation cases end in one of two kinds of settlement. An Order Approving Settlement awards a percentage of permanent disability and leaves the door open: you can generally apply to reopen the case within two years of the last payment if your condition worsens. A Section 20 settlement pays a lump sum and closes the case for good. Both must be approved by a Judge of Compensation, and the right choice depends on your medical future, how strong the claim is, and what other benefits are in play.
What is an Order Approving Settlement?
An Order Approving Settlement, often called an OAS, is the most common way a New Jersey comp case ends. The parties agree on a percentage of permanent partial disability, either of a body part under the statutory schedule or of partial total, and the judge approves it as an award.
Its defining feature is that it isn't final in one important sense. Under N.J.S.A. 34:15-27, you can generally apply to reopen within two years of the last payment if the injury gets worse or you need further treatment. A reopener can lead to more treatment, more temporary disability if you're out of work again, and an increased permanency award.
What is a Section 20 settlement?
A Section 20 settlement, named for N.J.S.A. 34:15-22, is a lump-sum payment that closes the claim permanently. It generally ends future claims for that injury, including reopening and further medical treatment.
Because it is final, the judge must find the settlement fair and just under all the circumstances before approving it. Section 20 settlements are often used when there is a genuine dispute about whether the injury is covered at all, for example a contested claim that is described in our page on denied claims. They can also make sense when both sides want certainty and the worker's medical future is well understood.
How do you choose between them?
Some questions that usually decide it:
- Is more treatment likely? If a doctor has said you may need surgery later, giving up the right to reopen is a real cost.
- Is the claim disputed? If compensability is shaky, a Section 20 may provide money that a trial might not.
- Is your condition stable? Settling before the full extent of a permanent injury is known risks undervaluing it. See permanent disability.
- Do you receive, or expect to receive, Medicare or Social Security Disability? These can change how a settlement should be structured.
- Do you want the case over? Finality has value, and some workers reasonably prefer it.
How do Medicare and Social Security affect a settlement?
If you are a Medicare beneficiary, or reasonably expect to become one, a settlement that closes future medical care has to take Medicare's interests into account. That is sometimes done through a Medicare Set-Aside arrangement, money set aside to pay for future injury-related care that Medicare would otherwise cover.
Social Security Disability benefits and workers' compensation interact through an offset. How a settlement is worded, particularly how a lump sum is allocated over your remaining life expectancy, can affect how much that offset reduces your Social Security. Outstanding child support judgments may also be satisfied from an award before it reaches you.
What happens at the settlement hearing?
Once the terms are agreed, the case is listed before the Judge of Compensation. You appear, in person or remotely as the Division permits, and answer questions under oath confirming how the injury happened, your current condition, and that you understand and accept the settlement. The judge reviews the medical evidence, sets the attorney's fee, and approves or declines the agreement.
After approval, an OAS award keeps the two-year window for reopening open. A Section 20 closes the case. Our page on workers' comp deadlines explains how the reopening clock is measured.
Talking to a lawyer about your situation
Settling is the decision in a comp case you are least able to undo, particularly with a Section 20. Before you accept a number or a settlement type, it makes sense to have someone review your medical records, the offer, and how it fits with any other benefits you receive. You can read more on the workers' compensation overview.
Gray Law Group is in Jefferson, Morris County, and represents injured workers in Morris, Sussex, Warren and Passaic counties and throughout northern New Jersey. If you've received a settlement offer, bring it to a consultation.
Frequently asked questions
Can I reopen a Section 20 settlement?
Generally, no. A Section 20 settlement is designed to close the case permanently, including future claims for that injury. That finality is why the judge must be satisfied it is fair before approving it.
Will settling end my medical treatment?
Under an Order Approving Settlement, you can generally apply to reopen the case within two years of the last payment if you need more treatment. A Section 20 settlement usually closes future medical benefits for the injury along with everything else.
Do I have to appear before the judge to settle?
Generally, yes. Settlements are approved at a hearing where you answer questions under oath to confirm you understand the terms. The Division may hold some hearings remotely.
Does the attorney's fee come out of my settlement?
The judge sets the fee, capped at 20 percent of the award under N.J.S.A. 34:15-64, and often divides it between the carrier and you. Any fee in a comp case must be approved by the judge.
This website is for informational purposes only and does not constitute legal advice. Prior results do not guarantee a similar outcome.