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The short answer
The number on the offer is not the number you take home, and every category that reduces it is knowable in advance.
Permanent disability already advanced, the attorney fee, medical and EDD liens, any Medicare set-aside. Ask for the net in writing before you sign — you are entitled to see the arithmetic.
The number on the offer is not the number you take home, and almost nobody explains the difference before it matters.
Everything that can attach
Labor Code § 4903 lists what the Appeals Board may allow as a lien against compensation. The categories that come up in real cases:
| § 4903 | What it is |
|---|---|
| (a) | Attorney's fees for legal services on the claim |
| (b) | Medical treatment expense incurred by or for the injured worker, and medical-legal costs |
| (c) | Living expenses of the worker or dependents after the injury |
| (d) | Burial expenses, capped by § 4701 |
| (e) | Living expenses of a spouse or minor children where the worker has abandoned or neglected them |
| (f) | State disability (SDI) benefits already paid under the Unemployment Insurance Code |
| (g) | Unemployment compensation paid for the same days |
| (h) | Paid Family Leave benefits already paid |
| (i) | California Victims of Crime Program indemnification |
Section 4903 ends at (i). There is no subdivision (j) — a point worth making because the Asbestos Workers' Account lien is often miscited to it. That lien comes from its own chapter: § 4414 directs the Account to file a lien to recover what it expended, and § 4416 makes it "a first lien against compensation" with priority over all other liens. Under § 4417 the Account also has a first lien against a third-party recovery.
Plus, outside § 4903: child support arrears, Medicare's interest, and — in a case with a third-party recovery — the workers' compensation carrier's own lien against that recovery.
The ones that actually bite
Attorney's fees
Set by a workers' compensation judge, not by the firm. § 4906 prohibits an attorney from demanding or accepting a fee until the Board has approved it. Generally 9% to 12% in a case of average complexity, up to 15% in a genuinely contested one, and as low as 1% where little work was required. How that works.
EDD reimbursement
If you collected State Disability Insurance while your claim was denied or delayed, EDD is entitled to be reimbursed out of your workers' compensation recovery for benefits paid for the same period.
This surprises people badly, and it is the most common unexpected deduction. It is not a penalty — SDI paid you while comp did not, and the comp award covers the same period.
And it is a reason to raise a delay early rather than living on SDI for a year. How the $10,000 in § 5402(c) treatment and the 90-day presumption work.
Medical liens
Providers who treated you and were not paid file liens. Lien claimants must pay a filing fee (§ 4903.05) and are subject to their own statute of limitations (§ 4903.5), and a substantial share of filed liens are defective, untimely, or unsupported.
They are frequently negotiable, and reducing them is one of the most direct ways the take-home number improves.
Child support
Support arrears can attach to a workers' compensation award. This is not discretionary and it is not something a settlement can be structured around.
Medicare — and the Set-Aside
If you are a Medicare beneficiary, or will be soon, Medicare's interest has to be considered before future medical is closed out.
CMS reviews a proposed Workers' Compensation Medicare Set-Aside where:
- You are a current Medicare beneficiary and the total settlement exceeds $25,000, or
- You have a reasonable expectation of Medicare enrollment within 30 months and the anticipated total settlement for future medical and disability/lost wages exceeds $250,000.
Submission to CMS is voluntary, not mandatory — there is no statute or regulation requiring it, though CMS recommends it.
What the Set-Aside means practically: a portion of the settlement is allocated to future injury-related medical care and must be spent on that care before Medicare pays. The money is yours, and it is not free money — it is your future treatment, prepaid, with reporting obligations attached.
And the third-party lien
If you recover from someone other than your employer, the workers' compensation carrier has a lien on that recovery for what it paid you.
But the lien is not automatic and not absolute. Where the employer's own negligence contributed to the injury, the lien can be reduced or eliminated entirely under the Witt v. Jackson line and its statutory successors.
How that lien is handled is frequently worth more than the difference between two settlement offers, and it is one of the most valuable things done in a case with both claims. How third-party claims and liens work.
What to ask before you sign
"What is the gross, and what is the net?" Get both numbers in writing.
"What liens are on file?" They are in the Board's file and can be listed.
"Has EDD asserted reimbursement, and for what period?"
"Is a Medicare Set-Aside required, and what is it funded at?"
"What are the medical liens, and have they been negotiated?"
And: "what does this close?" A Compromise and Release closes future medical permanently. A Stipulated Award does not. That difference is usually worth more than every lien on the list. Why.
Frequently asked questions
Why is my check so much smaller than the settlement?
Attorney fees, medical liens, EDD reimbursement, child support arrears, and any Medicare Set-Aside allocation all come out of the gross.
Do I have to pay back EDD?
If SDI paid you for a period the comp award also covers, EDD is entitled to reimbursement out of the recovery.
What is a Medicare Set-Aside?
An allocation of settlement funds for future injury-related medical care, which must be spent on that care before Medicare pays. CMS reviews proposals above $25,000 for current beneficiaries, or above $250,000 where enrollment is reasonably expected within 30 months.
Can medical liens be reduced?
Frequently. Many are defective, untimely, or unsupported, and most are negotiable.
Will the comp carrier take my personal injury settlement?
It has a lien for what it paid — but employer negligence can reduce or eliminate it, and how that is handled materially changes what you receive.
Talk to a lawyer
Free consultation. No fee unless we recover. You are not responsible for costs we advance if there is no recovery.
General information about California law, not legal advice about your case.
Law Offices of Solov & Teitell, APC · (213) 380-9310 · 24/7 (213) 463-6469
Printed from https://www.solovteitell.com/workers-compensation/liens-and-deductions/ · Last reviewed 2026-08-23