A settlement offer looks large until you convert weekly benefits into ongoing income and subtract the attorney fee. This calculator puts the lump sum and the weekly-benefit stream on the same footing, discounts the stream to present value, and shows what actually lands in your pocket.
Situation: Luis receives a $120,000 lump-sum offer. He currently draws $750 a week with 208 weeks (four years) of benefits remaining, and would take on $15,000 of future medical care if he settles. His attorney charges 20%.
Rate / rule: Present value of the weekly stream at a 4% discount rate ≈ $750 × 208 weeks adjusted to today’s dollars. Attorney fee = 20% × $120,000.
Calculation: PV of benefits ≈ $144,109. Net settlement = $120,000 − $24,000 fee − $15,000 medical = $81,000.
Situation: Maria has only 52 weeks of benefits left at $600 a week and is offered $45,000 with a $6,000 flat attorney fee and no future medical exposure because the settlement keeps medical open.
Rate / rule: PV of 52 weeks at $600 with a 4% discount is close to the undiscounted total because the horizon is short. Net settlement = $45,000 − $6,000.
Calculation: PV of benefits ≈ $30,600. Net settlement = $39,000 with medical left open.
Situation: Ahmed is offered $200,000 to close medical, has 260 weeks of benefits at $900 left, owes 25% contingency, and expects $90,000 of future surgery and care.
Rate / rule: The headline number shrinks fast: fee $50,000, medical $90,000. Net = $200,000 − $140,000. Compare against the PV of the remaining weekly stream.
Calculation: PV of benefits ≈ $218,000. Net settlement = $60,000.
PV of weekly benefits: the remaining weekly checks discounted at rate r per week over n weeks. With a $750 weekly benefit and 208 weeks at an annual 4%, that stream is worth roughly $144,109 in today’s dollars — more than the $120,000 face value of the offer because a lump sum could earn interest.
Attorney fee: workers’ compensation fees are set by statute in most states and are usually a percentage of the settlement (commonly 15–25%) or a flat fee approved by the judge or board. The fee comes out of the settlement, not out of your pocket separately.
Medical exposure: a full and final settlement that closes medical shifts all future treatment cost onto you. A settlement that leaves medical open shifts none of it. That single clause can change the value of an offer by tens of thousands of dollars.
Net comparison: the settlement wins only if net settlement proceeds exceed the present value of the benefits you give up.
| Clause | Full & final buyout | Medical left open |
|---|---|---|
| Weekly wage checks | End | End |
| Future medical bills | Your responsibility | Employer / insurer keeps paying |
| Future surgery or flare-ups | Not covered | Covered under the claim |
| Right to reopen the claim | Waived | Often preserved |
| Typical offer size | Larger headline number | Smaller, safer number |
A workers’ compensation settlement offer is quoted gross, before attorney fees, and almost never adjusted for the medical coverage you are giving up. Three deductions routinely cut the headline number by a third or more:
1. Attorney fees. In most states the fee on a settlement is set or approved by the workers’ compensation board and runs 15–25%. Some states cap it outright. The fee is deducted from the settlement, so it reduces what you receive but does not come out of your pocket separately.
2. Future medical costs. A full and final settlement that closes medical means every future doctor visit, prescription, imaging study and surgery is yours. For a back or shoulder injury with a realistic chance of later surgery, that exposure can easily exceed $50,000. A settlement that leaves medical open is worth considerably more in practice than a larger number that closes it.
3. Lost wage-benefit tail. If you settle, the weekly checks stop. If the checks would have continued for several years, the present value of that stream can exceed the net settlement — the single most commonly missed factor in evaluating an offer.
Weekly benefits are steady, keep medical open, and preserve the right to petition for more if your condition worsens. The price is that they last only as long as your entitlement, they can be disputed or cut off later, and they end when you reach maximum medical improvement in many jurisdictions.
A lump sum is final and immediate. You control the money, you can invest it, you are no longer subject to insurer interference or surveillance, and you can close a chapter that may have dragged on for years. The price is that you bear all future risk: no more checks if your condition deteriorates, no medical coverage if the settlement closes it, and no reopening of the claim.
The financial question is a present-value comparison, and the model is unforgiving. A four-year tail of $750 weekly benefits is worth roughly $144,109 today at a 4% discount rate, while a $120,000 offer net of a 20% fee and $15,000 of medical is $81,000. The gap is real, and it should drive the counter-offer.
| Lever | Effect on value | How to use it |
|---|---|---|
| Keep medical open | High — removes your largest risk | Trade headline dollars for open medical; it is usually worth more |
| Permanent disability rating | High — drives the statutory multiplier | Get an independent impairment rating, not just the company doctor’s |
| Future medical estimate | High — documented surgery costs | Obtain a written treatment plan and cost estimate from your specialist |
| Wage-benefit recalculation | Medium — raises the weekly base | Check that all overtime and bonuses were included in the average weekly wage |
| Attorney fee structure | Medium | Ask whether a flat fee beats contingency on a large settlement |
| Structured payout | Low to medium | Can add tax deferral but reduces flexibility |
The highest-leverage move is almost always the medical clause, not the headline figure. A settlement that leaves medical open at $90,000 can be worth more than a $150,000 full-and-final buyout on an injury likely to need further treatment. Ask for a written estimate of future care before you evaluate any offer.
⚠ Important Disclaimer: This calculator is a planning tool, not legal advice. Workers’ compensation rules, fee caps, benefit formulas and settlement clauses vary by state and are fact-specific. Discount-rate assumptions materially change present-value results. Consult a licensed workers’ compensation attorney in your state before accepting or rejecting any settlement offer.