July 25, 2025 | SIBTF.org – A new report from the California Legislative Analyst’s Office (LAO) has recommended major structural reforms to the Subsequent Injuries Benefits Trust Fund (SIBTF), citing unsustainable growth and a need to realign the program with its original intent. The analysis highlights how the SIBTF Reform Bill, such as AB 1329, could address expanding eligibility, rising costs, and system inefficiencies.
The SIBTF was originally designed to support workers with pre-existing disabilities who suffer a subsequent workplace injury, resulting in compounding impairments. However, the LAO now finds that the program has broadened to include a wide range of less-severe conditions, such as asthma and hypertension—many of which are not clearly disabling.
Key Findings from the LAO SIBTF Reform Report
- Dramatic Growth: The number of SIBTF applications has surged, with claim volume reaching approximately 5,000 per year—a nearly tenfold increase from a decade ago.
- Pending Backlog: As of early 2025, over 25,000 claims remain unresolved, creating delays and straining administrative capacity.
- Expanded Eligibility: Many applicants now qualify based on conditions that may not significantly impair work capacity, such as arthritis or prediabetes.
- Soaring Costs: Total liabilities have exceeded $5 billion, placing heavy assessment burdens on employers statewide.
- High Average Awards: Roughly 80% of approved applicants receive the maximum benefit—approximately $1,700 per week for life—suggesting the system no longer targets only the most seriously impaired workers.
Policy Recommendations in the SIBTF Reform Bill
The LAO report supports legislative efforts like the SIBTF Reform Bill AB 1329, which aim to:
- Reinforce minimum thresholds for what qualifies as a prior disability.
- Limit eligibility to applicants whose impairments clearly reduce earning capacity.
- Streamline documentation and require objective medical history.
- Ensure consistent audit enforcement and data collection to support oversight.
These changes could save billions in long-term costs while preserving the fund for workers with the most significant injuries.
Stakeholder Reactions
Legal experts, employer groups, and insurance analysts are watching closely as the Legislature considers next steps. Many agree that reforms are necessary to ensure the program remains solvent and aligned with its safety-net purpose.
By narrowing eligibility and improving case processing, policymakers hope to preserve access for the most severely impacted workers while reducing unnecessary claims and administrative bottlenecks.
Read the Full LAO Report
For a detailed breakdown of the policy analysis and legislative implications, visit the official LAO page:
Refocusing the Workers’ Compensation Subsequent Injury Program – LAO (July 2025)
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Read More from SIBTF.org:
- California Workers’ Comp Experience Declines in 2024: Impacts on SIBTF Payouts
- SIBTF Reform Bill AB 1329 Could Save California Employers Billions
- Commissioner Lara Alerts State Leaders to Rising Workers’ Comp Costs
FAQs: Understanding the SIBTF Reform Bill and Its Impact
What is the SIBTF Reform Bill?
The SIBTF Reform Bill, such as AB 1329, is a proposed piece of California legislation that aims to tighten eligibility, streamline documentation, and reduce the long-term financial burden on the state’s Subsequent Injuries Benefits Trust Fund (SIBTF).
How does the SIBTF Reform Bill affect injured workers?
If passed, the bill would maintain benefits for the most severely impaired workers but set clearer rules on what qualifies as a prior disability. This means applicants would need to meet stricter medical and legal standards.
Why is reform necessary now?
The LAO report shows that the SIBTF program has experienced rapid growth, high average payouts, and a large claim backlog. Without reform, employer assessment costs could continue to rise sharply.
Will current claims be affected?
Most versions of the SIBTF Reform Bill include a grandfather clause. That means existing claims would follow the current rules, while new applications would be subject to the updated criteria.
Where can I follow updates on the SIBTF Reform Bill?
You can monitor the bill’s progress via the California Legislative Information Portal, or stay informed through SIBTF.org’s legal updates and policy briefs.
What is SIBTF?
The Subsequent Injuries Benefits Trust Fund (SIBTF) helps California workers who suffer a new workplace injury and already had a prior disability. It offers supplemental compensation when combined impairments severely limit earning capacity.