California pays billions annually through a little-known state employee compensation program for conditions including impotence, allergies and other chronic diseases, leaving Gov. Gavin Newsom and state lawmakers scrambling to revamp the troubled program.
The program, called the Subsequent Injury Benefits Trust Fund, provides additional benefits to employees covered by State Employees’ Compensation who are injured on the job.
But critics say the benefit, which is funded by taxes on employers, has spiraled out of control with workers demanding huge payments of up to $1,700 a week for conditions like “high blood pressure, sleep apnea, arthritis, diabetes, headaches, acid reflux, asthma, allergies and impotence,” the audit said. Published last year.
“Nearly all claimants receive the state’s most generous disability benefit, $1,700 per week for life, a rarity in standard workers’ compensation,” the state legislative analyst wrote in a June 2025 report.
The fund was first created in the 1940s to encourage the employment of World War II veterans and others with disabilities.
However, thanks in part to a 2020 Federal Court decision, Todd v AIBTF, The number of claims and overall costs have risen significantly.
The review noted that the California appellate courts’ decision required a generous interpretation of disability claims, which resulted in annual costs for employers rising to between $2 billion and $3 billion.
Additionally, the backlog could push total liabilities to more than $20 billion within “a few years.”
In one case, a California prison guard was able to claim $1.9 million in lifetime benefits, or $1,284 per week, because he treated other ailments — including toe fungus and eczema — as work-disabling conditions in addition to spinal problems that earned him standard workers’ compensation benefits, according to a report in the Journal. Orange County Register.
Many applicants are given a 100% “disability rating” — enabling them to claim lifetime disability benefits, according to the legislative analyst.
“As benefits have grown, so have new claims, as individuals seek a significant benefit enhancement due to a host of pre-existing conditions such as acid reflux, migraines, sleep apnea, and a host of other conditions typically associated with aging and lifestyle, not necessarily workplace injuries,” Eric Loyer of the California Association of Counties wrote in March. Blog post.
High costs have strained county employers — Los Angeles County, for example, is credited with $11.8 million annually in assessments related to disability claims, whichAn increase of 433% since 2020.
California lawmakers have proposed reforms to the program, including a budget trailer bill drafted by the House Industrial Resources Department, Who runs the program.
“California’s current system for post-injury workers faces serious long-term sustainability challenges,” Newsom spokeswoman Tara Gallegos said in a statement.
“The state needs a stable, effective and reliable post-injury benefits trust fund program that ensures injured workers get the support they need without putting unsustainable pressure on state and local budgets.”
The Santa Ana law firm Silberman & Lam, which helps workers obtain benefits, declined to deny to the OC Register that clients are gaming the system.
“We say no to 80 percent of the people,” Silberman, who said he represents mostly low-wage workers, told the news site.