{"id":4766,"date":"2026-07-17T22:09:07","date_gmt":"2026-07-17T22:09:07","guid":{"rendered":"https:\/\/nextcitydigest.com\/?p=4766"},"modified":"2026-07-17T22:09:07","modified_gmt":"2026-07-17T22:09:07","slug":"gov-newsom-curbs-fund-paying-workers-up-to-1700-a-week-for-common-ailments","status":"publish","type":"post","link":"https:\/\/nextcitydigest.com\/?p=4766","title":{"rendered":"Gov. Newsom curbs fund paying workers up to $1,700 a week for common ailments"},"content":{"rendered":"
\n
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Gov. Gavin Newsom has signed immediate reforms to a state fund that paid as much as $1,700 weekly to people claiming that such common ailments as allergies, asthma and erectile dysfunction hampered their ability to work.<\/p>\n

Read more Antioch police failed to de-escalate situation before punching woman, expert says<\/a><\/p>\n

The new law tightens eligibility requirements for the Subsequent Injuries Benefits Trust Fund, which was established after World War II to help injured veterans land jobs. It morphed into a program that gave people receiving workers\u2019 compensation extra money for prior ailments exacerbated by their new injuries. It is funded by an annual tax on employers.<\/p>\n

Newsom sought the reforms in a trailer bill to his budget package after declaring that the SIBTF was unfettered and out of control, without the safeguards of the traditional workers\u2019 compensation system. Unsustainable, the fund\u2019s liabilities were expected to hit $30 billion by 2029 amid skyrocketing applications.<\/p>\n

Here\u2019s how the program operates: Workers file claims for their employment-related injuries with the workers\u2019 compensation system and then file a second claim with the SIBTF for preexisting health conditions that affect their ability to work. Some applicants who are receiving benefits have listed their sleep apnea, obesity and arthritis. Others have listed their infertility and hemorrhoids.<\/p>\n

Costs for the program have spiraled over the years.<\/p>\n

The state Department of Industrial Relations reported that total payments from the SIBTF climbed from $28 million in 2014 to $326 million in 2025. And the number of yearly applications has soared from 1,011 in 2014 to 5,378 in 2024, said a report for the state Commission on Health and Safety and Workers\u2019 Compensation.<\/p>\n

A March report for an Assembly budget subcommittee said 25,000 cases are now pending, a number that is expected to hit 30,000 in July, creating a five- to 10-year backlog.<\/p>\n

Cashing in<\/h4>\n

A look at some cases explain the increase in SIBTF\u2019s popularity.<\/p>\n

\n<\/div>\n

A California Highway Patrol lieutenant received a 55% disability rating from workers\u2019 compensation for his hypertension. He then went to the SIBTF and claimed preexisting health conditions, including lumbar injury, rhinitis, asthma, sleep apnea, erectile dysfunction and seborrheic dermatitis, or red, flaky skin. He received back benefits from the SIBTF of $208,680 and $1,269 weekly, worth an estimated $2 million over his lifetime, according to Santa Ana law firm Silberman & Lam.<\/p>\n

In another case, a California prison guard with spinal problems also claimed other ailments, including toenail fungus and eczema, as work-disabling conditions. He received $291,053 in back benefits and a weekly benefit of $1,284 \u2014 with yearly cost-of-living increases \u2014 from the SIBTF.<\/p>\n

The guard\u2019s lifetime benefits from the special fund are estimated at $1.9 million. That\u2019s on top of what he received from his workers\u2019 compensation claim, which ended in a 79% permanent disability for hypertensive heart disease and trauma to his psyche.<\/p>\n

But the new reforms could change all that for some claimants.<\/p>\n

\n<\/div>\n

The reforms require that the prior medical condition must have been diagnosed before the new injury and that it must be job disabling. The conditions do not apply to claims submitted before July 1, 2020, or those close to being adjudicated.<\/p>\n

Read more Bay Area and California both lost jobs in June, new report shows<\/a><\/p>\n

Attorney Jason Marcus, past president of the California Applicants Attorneys Association, said the reforms raise the threshold that workers have to meet to receive benefits.<\/p>\n

\u201cI characterize this as a major takeaway for injured workers \u2026 they got nothing in return. To say I\u2019m frustrated about that is an understatement,\u201d Marcus said. \u201cThere\u2019s a lot of things these reforms do that contradicts what the courts have been telling us for 10, 15 years.\u201d<\/p>\n

Reforms needed<\/h4>\n

Supporters of the changes say the program needed to be harnessed.<\/p>\n

\u201cAt the end of the day, these reforms get us substantially back to what the intent of the fund was, to offer people benefits over and above workers\u2019 compensation if the subsequent injury made the (prior) disability worse,\u201d said Jerry Azevedo, a spokesman for the Workers\u2019 Compensation Action Network, a coalition of reform-minded employers, insurers and brokers.<\/p>\n

\u201cWe suspect it will curtail claims substantially,\u201d Azevedo said, although he said people may still try to claim their common ailments.<\/p>\n

\u201cThere\u2019s no question workers\u2019 compensation attorneys and medical evaluators are going to push the envelopment,\u201d he said. \u201cBut we think the lines are much clearer now, with a lot less room for gamesmanship.\u201d<\/p>\n

Some of that gamesmanship occurred when former Orange County Superior Court Judge Israel Claustro tried to profit from the SIBTF program by forming a company to write and submit medical reports for applicants. However, Claustro, a county prosecutor at the time, was not a medical professional, as required by law to operate such a company.<\/p>\n

Another problem was that Claustro hired a doctor who had been previously convicted of federal fraud to do the evaluations and falsely submit them under the names of other physicians. The state fund sent more than $3 million to Claustro\u2019s medical company.<\/p>\n

Claustro pleaded guilty in January to a federal charge of fraud and resigned from the bench. He is scheduled to be sentenced in August.<\/p>\n

Read more Two elderly individuals found deceased in San Jose residence<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Subsequent Injuries Benefits Trust Fund allowed workers to receive millions for maladies such as toenail fungus, ED, infertility and hemorrhoids.<\/p>\n","protected":false},"author":1,"featured_media":4765,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4766","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nGov. Newsom curbs fund paying workers up to $1,700 a week for common ailments - Next City Digest<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nextcitydigest.com\/?p=4766\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gov. 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