A lot of companies will pay what they call advances to injured seamen each month while they are recovering. Now, under the law, the company is supposed to be paying that seaman an amount that it takes for him to live on land. When the company steps in and says we are going to pay you extra so you can actually meet your bills each month and they’re going to pay you that advance, to me that proves that that company was not paying you enough to begin with with your maintenance checks.
Many of our clients receive “advances” in addition to “maintenance” payments each month. The term “advances” is used by companies to describe what they believe are additional payments above and beyond what they believe to be your proper rate of maintenance. Notice that I said what ‘they’ believe to be your proper rate of maintenance. It has been our experience that almost all companies pay a grossly low rate of maintenance of approximately $15.00 to $40.00 per day. Then, these same companies will pay additional “advances” so that you can afford to actually pay your monthly bills. Whenever our office becomes involved in a maritime Jones Act injury case we immediately notify the company that our client requires the full payments each month in order to pay his monthly bills. We do not care if the company characterizes the extra payments as “advances” or labels the payments under maintenance. The point is that every maritime company should pay the full amount that an injured seaman needs to pay his monthly bills as the maintenance payment each month. The term “advances” is simply the way most companies try to characterize, or more accurately mis-characterize, what they believe to be additional payments above and beyond maintenance. We strongly recommend that you send your company a detailed listing of your monthly bills at the outset of your claim so that your company is then on notice concerning how much it actually takes for you to pay your monthly bills. You can download our maintenance worksheet here.
One final thought about advances. Many of our clients actually have short-term disability and long-term disability policies through their company. We immediately advise these clients to apply for short-term disability and long-term disability following their injuries. Then, if their company ever attempt to reduce or terminate what they characterize as advances, our clients can seek full payment through their disability insurance policies.
There are several reasons why it is better to receive the highest rate of maintenance possible rather than allowing your employer to simply categorize the payments to you as advances. As we all know, injured seamen will typically receive maintenance payments but most employers will also pay an additional payment as advances each month. This has several unfortunate effects to the injured seaman.
First, many advances are categorized as wages by your employer. This means that your employer is essentially continuing to pay your wages while you are injured after your maritime accident. Unfortunately, this also means that these payments are taxable to you the same as wages would be if you had continued to work. Maintenance payments, however, are generally not taxable income to you. This means that the more money you can have classified as maintenance by your employer, the less tax you will owe at the end of the year.
Additionally, advances are often viewed as amounts that the injured employee must pay back at the end of any type of claim or settlement. In reality, this very rarely happens but if your case does go to court, your employer will absolutely try to take credit for the advances that your employer previously provided to you. In every case in which our clients receive advances that is ultimately tried to a judge or a jury, each employer will proudly declare to the jury that it voluntarily provided advances to our client which it did not legally have to do under the law. We strongly disagree with this statement and we often argue to the jury that our client was entitled to the money anyway as maintenance payments. Unfortunately the employers often gain points with the judge or jury by trying to say that they paid the injured maritime worker more than they had to under the law. By making sure that your company pays the highest rate of maintenance possible, you can avoid any arguments that your company was voluntarily paying additional payments to you.
Call us if you have any questions about what the advance is. Call is if you have any questions about how much your company should pay you in actual maintenance payments rather than advances.