New York Court Blocks City’s Attempt to Recoup Firefighter Injury Payments After Retirement

A recent ruling by the New York Court of Appeals has drawn a firm line on the limits of reimbursement rights for municipalities in firefighter injury cases. In Matter of Schulze v. City of Newburgh Fire Department, the state’s highest court unanimously held that cities cannot recover post-retirement disability supplements from workers’ compensation awards. The case involved a $106,000 reimbursement bid by the City of Newburgh, which was denied on the grounds that the payments in question were not ‘wages’ as defined by state law.

The firefighter at the center of the case, Adam Schulze, suffered debilitating injuries while on duty in 2012 and was later granted a performance of duty retirement pension. Under General Municipal Law § 207-a(2), the city was required to supplement his pension to match his prior salary. When Schulze later sought retroactive workers’ compensation for the same period, the city attempted to claw back the previously paid supplements.

While a judge allowed limited reimbursement for the period when Schulze was still employed, the courts consistently rejected the city’s claim to any post-retirement payments. The appellate court and the Court of Appeals agreed that these pension supplements, because they are paid to retirees rather than active employees, fall outside the scope of reimbursement provisions in the Workers’ Compensation Law.

This case sends a clear message to municipal insurers and risk managers: timing and statutory interpretation are critical. Failure to act promptly or to understand the limits of recoverable compensation could lead to unrecoverable financial losses. The ruling emphasizes the need for close coordination between disability and workers’ compensation benefits to avoid costly administrative missteps.