January 7, 2026 | SIBTF.org — California’s Subsequent Injuries Benefits Trust Fund (SIBTF), a cornerstone of the state’s workers’ compensation system, is entering a pivotal year. With escalating fund liabilities and Governor Newsom’s veto of Assembly Bill 1329 in late 2025, 2026 is expected to bring substantial changes affecting both injured workers and employers.
Historical Context: Why the SIBTF Exists
The SIBTF was created in 1945, in the aftermath of World War II, to support workers returning with permanent disabilities (PD). Its primary goal was to provide additional compensation when a new workplace injury combined with a pre-existing disability, preventing employers from being unfairly responsible for disabilities they did not cause.
The fund encourages employers to hire and retain workers with prior injuries or chronic conditions by limiting financial exposure, while also ensuring injured employees receive full compensation for cumulative disabilities.
A Solvency Crisis in the Making
While the SIBTF initially addressed severe disabilities, broader eligibility and evolving case law have contributed to rapidly increasing costs. Key figures highlight the fund’s growing financial strain:
- 2010 payouts: $13.6 million
- 2022 payouts: $232 million
- Projected liabilities (2026): $7.9–$10.5 billion for claims already filed or pending
Because the fund is financed through employer assessments, these payouts directly affect businesses:
- 2015 assessment: ~$14 million
- 2025 projected assessment: over $850 million
- Future projection: potentially $1.5 billion by 2030
These trends have prompted legislators and the administration to call for major structural reform.
AB 1329 Veto and the Call for Comprehensive Reform
In October 2025, Governor Newsom vetoed AB 1329, which aimed to recalibrate SIBTF eligibility. The veto was based on concerns that the bill could expand, rather than limit, eligibility, particularly through language that included “activities of daily living” (ADLs) in prior disability calculations.
Rather than signing the bill, Newsom directed the Department of Industrial Relations (DIR) and the Division of Workers’ Compensation (DWC) to prepare a comprehensive SIBTF reform plan for inclusion in the January 2026–27 state budget.
This move signals a shift from piecemeal legislative changes to a coordinated administrative strategy designed to balance worker protections with fund solvency.
Expected 2026 Reforms
While the final package is pending, several reforms are expected to take effect in 2026:
- Neutral Qualified Medical Evaluators (QMEs) – claims may require assessments by state-selected neutral QMEs rather than doctors chosen by claimants or employers. This aims to reduce bias and ensure fair disability evaluations.
- Stricter Eligibility Rules – Pre-existing disabilities will likely be scrutinized more rigorously, with minor conditions and age-related ailments potentially excluded from claims.
- Firm Statute of Limitations (SOL) – Currently, claims can be filed under a “reasonable time” standard. A defined filing deadline is expected, reducing long-tail claims and improving fiscal forecasting.
Together, these reforms are intended to restore the fund’s original mission while preventing further escalation of liabilities.
Practical Implications for Workers and Employers
For injured workers, the changes may require clearer medical documentation and adherence to stricter timelines. While eligibility may narrow, reforms are also expected to bring more predictable claim outcomes.
For employers and insurers, neutral QMEs and a firm SOL provide greater certainty in liability and assessment planning, reducing exposure to unexpected large payouts.
Staying informed will be critical as the 2026 budget and regulatory changes are implemented.
Visit the official DWC SIBTF page for current eligibility rules and claim resources.
Subscribe to SIBTF.org to receive timely updates on legislative reforms, QME guidance, and SIBTF claim analysis.
Read More from SIBTF.org:
- California Updates Temporary Total Disability (TTD) Rates for 2026
- California Signals Major SIBTF Overhaul After AB 1329 Veto, Reforms Expected in 2026
- Court of Appeal Reaffirms Burden on SIBTF in Benefit Reduction Disputes
FAQs: About the 2026 SIBTF Overhaul
Why did Governor Newsom veto AB 1329?
He concluded the bill did not adequately address the fund’s growing liabilities and could expand eligibility rather than limit it.
Will SIBTF benefits be eliminated in 2026?
No. The program will continue, but eligibility, medical evaluation, and filing rules may change.
When will the new reforms take effect?
The proposals are expected to be presented with the 2026–27 budget and may take effect later in 2026.
Where can I find official SIBTF guidance?
The California Division of Workers’ Compensation maintains official resources: DWC – SIBTF Information.