Skip to main content

Volume 11 - Opinions of Counsel SBRPS No. 6

Opinions of Counsel index

Persons with disabilities and limited incomes exemption (income requirement) (workers’ compensation); Senior citizens exemption (income requirement) (workers’ compensation) - Real Property Tax Law, §§ 459-c, 467:

Workers’ compensation payments are income for purposes of determining eligibility for the persons with disabilities and limited incomes exemption and the senior citizens exemption.

We have been asked whether workers’ compensation payments are considered income in determining eligibility for the persons with disabilities and limited incomes or senior citizens exemption (Real Property Tax Law, §§ 459-c, 467, respectively). In our opinion, they are income.

The definition of income in section 459-c(5)(a) closely parallels the longstanding definition of income in the senior citizens exemption (RPTL, § 467(3)(a)). As we have advised assessors regarding section 467, “Income from all sources [with specific exceptions] is required to be considered in determining eligibility for exemption. Income includes all social security payments . . . and disability payments, worker’s compensation, etc.” (N.Y.S. Assessor’s Manual, Vol. 4, § 4.01, p.17.46 (1/1/01)). Given the similarity of the statutory definitions, we reach the same conclusion as to section 459-c.

As we noted in 1 Op.Counsel SBEA No. 87, “the apparent intention of the Legislature in providing for the income requirement [of § 467] was to exclude anyone who had a certain amount of cash accruing to him with which to meet expenses during the income tax year immediately preceding the date of making application for the exemption.” The same rationale pertains to section 459-c.

The nature of workers’ compensation payments also supports this conclusion. They replace the common-law master-servant liability for injury or death to the latter with payments “for a statutorily prescribed amount generally dependent upon wages received by the employee. . . . Payments under the [the Workers’ Compensation Law] are part of the compensation agreed to be paid for services rendered in the course of employment” (109 N.Y. Jur2d, Workers’ Compensation, § 1). {1}  These payments may be readily contrasted with income sources such as supplemental security income which is “a voluntary transfer without consideration and therefore . . . a ’gift’ and not ’income’ for purposes of . . . section 467” (4 Op.Counsel SBEA No. 72). {2}

Accordingly, it remains our opinion that workers’ compensation payments are income for purposes of section 467 of the RPTL. We reach the same conclusion as to section 459-c.

March 8, 2001

{1}  “The liability of an employer under the Workers’ Compensation Law is a quasi-contractual obligation imposed by reading the statute into a contract of employment” (109 NY Jur2d, Workers’ Compensation, § 1).

{2}  We recognize that as a general rule, “gross income [for Federal income tax purposes] does not include . . . amounts received under workmen’s compensation acts as compensation for personal injuries or sickness” (26 USCS § 04; 33A Am Jur2d, Federal Taxation, 8310). However, we have consistently stated that whether moneys received are taxable or nontaxable for income tax purposes is not dispositive of the issue of inclusion or exclusion for purposes of the senior citizens property tax exemption (Engle v. Talarico, 33 N.Y.2d 237, 306 N.E.2d 796, 351 N.Y.S.2d 677 (1973)), and we reach the same conclusion for purposes of section 459-c (contrast the definition of income for purposes of the enhanced school tax relief (STAR) exemption (RPTL, § 425(4)(b)(ii))).