Governor Schwarzenegger approves loan to injured worker fund

Sacramento - Governor Arnold Schwarzenegger cleared the way for checks to begin flowing to injured workers paid through the state-run Subsequent Injuries Fund (SIF) by approving a general fund loan. The SIF, which had been depleted due to higher overall costs and a funding gap, will now receive up to $3 million in loans from the state general fund to provide legally mandated benefits to injured workers.

"The release of these funds assists injured workers who depend on them to pay bills and put food on the table," said Department of Industrial Relations Acting Director Chuck Cake.

The injury fund covers benefits to injured workers who already had a disability at the time of a subsequent injury, and whose combined disability rating exceeds 70 percent. Approximately 1,600 injured workers receive SIF benefits in a program operated by the Department of Industrial Relations, with checks distributed by the State Compensation Insurance Fund.

Under legislation signed into law in September 2003, the SIF will move to a "user funding" source beginning in January 2004. At that time, revenue for the SIF will come from assessments charged to California employers. This shift in funding from the General Fund to employer assessments produced a cash flow shortage that caused payments to stop when the funds were exhausted. The Governor's action provided a loan so past benefit payments could be made and ongoing payments could continue