California is paying out billions annually through a little-known state workers’ compensation program for conditions that include sexual dysfunction, allergies and other chronic ailments — leaving Gov. Gavin Newsom and state lawmakers scrambling to revamp the troubled program.
Called the Subsequent Injuries Benefits Trust Fund, the program provides extra benefits to employees covered by state workers’ compensation who sustain an on-the-job injury.
But critics say the benefit, which is funded by taxes on employers, has spiraled wildly out of control as workers claim hefty payments of $1,700 per week for conditions such as “hypertension, sleep apnea, arthritis, diabetes, headaches, acid reflux, asthma, allergies, and sexual dysfunction,” according to an audit 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,” wrote the state Legislative Analyst in a June 2025 report.
The fund was first established in the 1940s to encourage hiring 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 total costs have skyrocketed
The California Courts of Appeal decision required a generous interpretation of disability claims — spiking annual employer costs to between $2 billion and $3 billion, the audit noted.
Additionally, a growing backlog could push total liabilities past $20 billion within “a few years.”
In one instance, a California prison guard was able to claim $1.9 million in lifetime benefits, or $1,284 a week, because he tacked on other ailments — including toe fungus and eczema — as work-disabling conditions on top of spinal problems that earned him a standard workers’ compensation benefit, according to a report in the Orange County Register.
Many applicants are awarded a 100% “disability rating” — enabling them to claim lifetime disability benefits, according to the Legislative Analyst.
“As benefits grew, so did new claims, with individuals seeking substantial enhancement to benefits due to combinations of pre-existing conditions like acid reflux, migraines, sleep apnea, and a host of other conditions that are commonly associated with aging and lifestyle, not necessarily workplace injuries,” wrote Eric Lawyer of the California Association of Counties in a March blog post.
The skyrocketing costs have strained county employers — Los Angeles County, for example, is on the book for $11.8 million annually in assessments towards the disability claims, an increase of 433% since 2020.
California legislators have proposed reforms to the program, including a budget trailer bill drafted by the Department of Industrial Resources, which administers the program.
“California’s current system for injured workers with subsequent injuries is facing serious long-term sustainability challenges,” said Tara Gallegos, spokesperson for Newsom, in a statement.
“The state needs a stable, effective, and reliable Subsequent Injuries Benefits Trust Fund program that ensures injured workers get the support they need without putting unsustainable pressure on state and local budgets.”
Santa Ana law firm Silberman & Lam, which helps workers claim the benefits, denied to the OC Register that clients are gaming the system.
“Eighty percent of the people, we tell ‘no’ to,” Silberman, who said he mostly represents low-wage workers, told the news site.