When is "payment" of compensation made pursuant to a temporary notice of compensation payable so as to require five days notice to stop payment?

This case involved the situation where a Notice of Temporary Compensation Payable was issued to a claimant along with a check in payment of the initial wage loss. The employer then decided that the injury was not disabling and issued a stop payment on the check. The claimant received the check and deposited it and did not learn of the stop payment until the bank advised her. The employer subsequently issued a Notice Stopping Temporary Compensation Payable ("NSTC") and a Notice of Denial ("NCD"). The claimant then filed a penalty petition, claiming that the employer violated §406.1(d)(5)(i) of the Act by failing to issue the NSTC or NCD within five days of the payment. The employer contended that it was not subject to that provision of the Act because it never issued any payment to the claimant. The workers' compensation judge and Appeal Board denied the penalty petition, and on appeal, the claimant argued that the workers' compensation judge erred in finding that the employer did not make a "payment" to the claimant. The Commonwealth Court held there was no error as "payment" was never issued since a "payment" is conditioned upon the Actual receipt of funds; if the transfer does not occur, then payment is never made.

Case Law Alert, 3rd Qtr 2010