In a third-party case with a $100,000 recovery, attorney fees $36,000, costs $4,000, WC lien $40,000, what is the net recovery to the injured worker?

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Prepare for the California Self‑Insurance Plans (SIP) Exam with our interactive quiz. Benefit from multiple-choice questions, detailed explanations, and essential tips to enhance your knowledge and succeed in your exam!

Multiple Choice

In a third-party case with a $100,000 recovery, attorney fees $36,000, costs $4,000, WC lien $40,000, what is the net recovery to the injured worker?

Explanation:
When a worker wins a third-party recovery, the money is first used to cover the costs of pursuing that claim and to satisfy any workers’ compensation lien. The remainder goes to the injured worker. Total third-party recovery: 100,000 Attorney fees: 36,000 Costs: 4,000 Subtract these: 100,000 − 36,000 − 4,000 = 60,000 Now reimburse the workers’ compensation lien from that sum: 60,000 − 40,000 = 20,000 The injured worker’s net recovery is 20,000.

When a worker wins a third-party recovery, the money is first used to cover the costs of pursuing that claim and to satisfy any workers’ compensation lien. The remainder goes to the injured worker.

Total third-party recovery: 100,000

Attorney fees: 36,000

Costs: 4,000

Subtract these: 100,000 − 36,000 − 4,000 = 60,000

Now reimburse the workers’ compensation lien from that sum: 60,000 − 40,000 = 20,000

The injured worker’s net recovery is 20,000.

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