Navigating Responses to Requests for Lump-Sum Payments of Permanent Disability Awards in Oregon
Updated to reflect changes coming January 1, 2026.
You’ve done it – the claim has closed. This is a difficult feat in and of itself. A permanent partial disability (PPD) has been accurately determined and will be awarded in installments. You are ready to begin installments (or you have already started paying installments), when you receive a request for lump-sum payment of the remaining balance of PPD. This can raise a flag for concern when you are still within the 60-day window of time in which the worker can request reconsideration.
The application (Form 1174) for Approval of a Lump-sum Payment of Award includes bold language saying, “I understand that by applying for and accepting a lump-sum payment of any part of my permanent award, I give up the right to appeal the amount of the award.”
How do you proceed? Do you approve the request or deny? Is there any risk in just going ahead and approving? If you deny, do you risk the denial being challenged?
When determining how to answer these questions, we have to first look at ORS 656.230(1), which provides:
“When a worker has been awarded compensation for permanent partial disability, and the worker requests payment of all or part of the award in a lump sum payment, the insurer shall make the payment requested unless the:
(a) Worker has not waived the right to appeal the adequacy of the award;
(b) Award has not become final by operation of law;
(c) Payment of compensation has been stayed pending a request for hearing or review under ORS 656.313; or
(d) Worker is enrolled and actively engaged in training according to rules adopted pursuant to ORS 656.340 and 656.726.”
In a Board decision from 2021, Vern E. Giltner, 73 Van Natta 327 (2021), the Board addressed a situation where a worker argued that the waiver of the right to appeal the adequacy of PPD satisfied one of the listed conditions thus requiring the carrier to make the requested lump sum payment.
However, the Board in Giltner found that ORS 656.230(1) requires the carrier to make a lump sum payment of a PPD award in response to a claimant’s request unless one of the four conditions is satisfied. Therefore, the existence of any of those conditions listed in ORS 656.230(1)(a) through (D) creates an exception to a carrier’s obligation to make the requested lump sum payment.
Applying this, the Board in Giltner concluded that the waiver of the right to appeal the award’s adequacy does not automatically render the award final because claimant could still request reconsideration on the basis that the claim was prematurely closed, a finding that could result in an order rescinding the Notice of Closure and its permanent disability award. The Board, applying ORS 656.230(1)(b), OAR 436-060-0060(1)(b) and Robert G. Green, 66 Van Natta 414 (2014), determined that the carrier was not required to make the requested lump sum payment of PPD granted in the Notice of Closure because the award was not final by operation of law. Essentially, in Giltner, the Board ruled the carrier is not required to make the lump sum payment based on claimant’s waiver in the lump-sum request if the 60-day appeal period had not yet expired.
What does this mean? Based on Giltner, if the request for a lump sum payment comes following the Notice of Closure, there is an obligation to pay unless one of the four listed exception applies. If one of those is triggered, then there is no obligation to pay.
However, is there harm in approving the lump sum even if the award is not yet final, or one of the other exceptions apply? Potentially. A worker may request reconsideration for other reasons, such as premature closure, that could still end up impacting the ultimate PPD determined within a claim should the claim have been found to be prematurely closed. Other considerations are those that ultimately extend the life of a claim such as a request for new/omitted conditions that necessitate reopening and then reclosing a claim.
Some of this difficulty has been addressed, with House Bill 2802 (Lump Sum Payments) due to take effect as of January 1, 2026. For additional background information, please see Kevin’s posts from July 14, 2025: 2025 Oregon Legislative Sessions Comes to an End – SBH Legal as well as Kevin’s November 10, 2025 post: Oregon WCD Rulemaking Meetings Set for November 18-19, 2025 – SBH Legal
The pending changes to OAR 436-060-0060 Lump Sum Payment of Permanent Partial Disability Awards will be modifying the language on the lump sum payment process to correct the Giltner case. Specifically, they will remove the reference to challenges to the adequacy of the award, and instead clarify that the insurer must make the payment requested if the worker has waived the right to request reconsideration of the notice of closure. Additional changes address if the award has become final by operation of law, with an exception if the insurer/self-insured employer has already requested their own reconsideration, with the reconsideration process still ongoing. These changes will be helpful for all parties to navigate the lump sum payment process going forward in 2026, and help eliminate the guesswork that has been in place.
For now, the best practice until the rule change is to examine each request on a case-by-case basis, determine if any of the exceptions apply, and consider whether it seems likely you may receive a request for reconsideration regardless.
If you would like to discuss a request for a lump-sum payment of a PPD award, please let me know. You can contact me at 971-383-2853 or at pnatale@sbhlegal.com.
Posted by Peter Natale.
