What Are ''gap Payments'' ?
In Murphy v. Workers' Compensation Appeal Board (City of Philadelphia), 871 A.2d 312 (Pa. Cmwlth. 2005), the Director of Provider Relations for CompServices testified that when "an employee has a work-related injury and is not on Injury on Duty (IOD) status or sick leave, the City makes workers' compensation payments, which it calls 'gap payments.'
He explained that gap payments are 'payments paid to the individual while they are being processed by the Board of Pensions and Retirement for their service-connected disability pensions.'
CompServices continues to make those payments until it receives written notice that service-connected disability benefits have been awarded.
Those benefits are always awarded to a retroactive date.
Because both the workers' compensation gap payments and the pension benefits are for injuries occurring on duty, CompServices deducts the workers' compensation payment from the pension award.
He explained that 'literally the City has just taken money out of one side of its pockets and put it into the other side of its pockets.'" Id. at 316-17.
The court deemed this testimony sufficient to support the finding that claimant's pension benefits, paid to her because her injury was work-related, were paid in lieu of workers' compensation and, therefore, ruled that a pension offset is proper. Id.