Colorado workers’ compensation death benefits pay eligible dependents two-thirds of the deceased worker’s average weekly wage after a job-related death, along with up to $12,500 toward funeral and burial costs.1Justia. Colorado Revised Statutes Section 8-42-114 (2024)2Justia. Colorado Revised Statutes Section 8-42-123 (2024) – Funeral and Burial Expenses Payments continue in ongoing installments to a surviving spouse and dependent children, subject to an annually adjusted weekly cap. The claim runs through the Colorado Division of Workers’ Compensation, and survivors have two years from the date of death to file.
Who Can Claim Benefits
Colorado recognizes three groups of dependents, and the rules differ for each.
Surviving Spouse
A spouse married to the worker at the time of death receives two-thirds of the worker’s average weekly wage, up to the state’s annual cap.1Justia. Colorado Revised Statutes Section 8-42-114 (2024) Those payments continue indefinitely unless the spouse remarries, in which case the spouse gets a final lump sum equal to two years of benefits. A spouse who was legally separated and not financially dependent on the worker may not qualify. If more than one person claims spousal status because of a common-law marriage dispute, a court decides.
Dependent Children
Children who depended on the worker’s income receive benefits until age 18, or until age 21 if enrolled full-time in an accredited school.1Justia. Colorado Revised Statutes Section 8-42-114 (2024) A child whose disability prevents self-support can receive benefits indefinitely. Stepchildren and legally adopted children stand on the same footing as biological children. A child who was not legally adopted has to show actual financial dependence on the worker. When a surviving spouse and children both qualify, they share the benefit.
Other Dependents
Parents, siblings, and others who relied on the worker’s income can qualify, but they carry a heavier burden of proof. Expect to produce records of shared expenses, bank transfers, or tax filings showing the support. Partial dependence produces a proportionally smaller benefit. If several dependents come forward across categories, a judge can divide the total based on each person’s level of need and prior support.
How Much the Benefit Pays
The weekly benefit is two-thirds of the deceased worker’s average weekly wage. Average weekly wage includes regular pay, overtime, bonuses, and other job-related compensation. Earnings from a second job count as long as they were reported for tax purposes.1Justia. Colorado Revised Statutes Section 8-42-114 (2024)
The state caps the weekly amount and updates the cap each year. The Division of Workers’ Compensation posts current maximum rates on its website, so check the figure that applied on the date of death. A sole dependent receives the full two-thirds. Multiple dependents share the total under statutory guidelines, or an administrative law judge divides it if there’s a fight over shares.
Payments usually arrive biweekly through the employer’s workers’ compensation insurer, and direct deposit is generally available. The Division can impose penalties on an insurer that misses deadlines. Colorado also permits lump sum settlements in place of ongoing payments, but the Division has to approve any settlement before it’s final. For a spouse who could otherwise draw benefits for decades, the tradeoff between immediate cash and lifetime installments deserves careful math before signing.
Funeral and Burial Payment
Whether or not the worker leaves any dependents, the employer or its insurer must pay up to $12,500 for funeral and burial costs in a single lump sum within 30 days of the death.2Justia. Colorado Revised Statutes Section 8-42-123 (2024) – Funeral and Burial Expenses Payment can go directly to the funeral home or to whoever fronted the money. If the worker leaves no dependents, this payment and any compensation that accrued during the worker’s lifetime are all the estate can collect.
Filing the Claim
Two separate deadlines run at the same time. Miss either one and the claim can be lost.
Notice to the Employer
Colorado requires written notice of the injury or death to the employer within four working days of the incident.3Justia. Colorado Revised Statutes Section 8-43-102 (2022) – Notice to Employer In a death case, notice typically comes from family or their representative. The employer then reports the death to its workers’ compensation carrier, which opens an investigation.
Formal Claim With the Division
Dependents must file a formal claim for compensation with the Colorado Division of Workers’ Compensation within two years of the worker’s death.4Justia. Colorado Revised Statutes Section 8-43-103 (2021) – Notice of Injury – Time Limit Missing the two-year deadline forfeits benefits unless extraordinary circumstances justify an extension. Longer deadlines apply in limited situations involving radiation exposure, asbestos-related diseases, and certain cancers.
Filing requires a death certificate, proof of the dependent relationship, and medical evidence connecting the death to a workplace injury or occupational illness. That medical link is often the hardest part. Insurers routinely contest whether the death was truly work-related, especially for heart disease, cancer, or other conditions that develop over time. An independent medical opinion explaining how the job caused or contributed to the death can decide the claim.
After the claim is filed, the insurance carrier has 20 days to notify dependents in writing whether it accepts or contests liability.5Justia. Colorado Revised Statutes Section 8-43-203 (2024) – Notice Concerning Liability If liability is admitted, payments start. If the carrier contests, the next step is a hearing.
If the Claim Is Denied
Denied claims and disputes over dependent status or benefit amounts go to the Office of Administrative Courts. Dependents file an Application for Hearing at the office closest to the claimant, in Denver, Colorado Springs, or Grand Junction.6Office of Administrative Courts. Application for Hearing Instructions An administrative law judge hears evidence and issues a written order.
A party who disagrees with the order has 20 days from the mailing date to file a Petition to Review with the Industrial Claim Appeals Panel, and Panel decisions can be appealed further to the Colorado Court of Appeals within 21 days.7Department of Labor and Employment. Workers’ Compensation Appeal Process Mediation is available earlier in the process and often resolves disputes faster than a contested hearing, which matters when a family is already short on income.
Taxes on the Benefits
Workers’ compensation death benefits are exempt from federal income tax. The IRS treats amounts paid under a workers’ compensation act as nontaxable, and that exemption extends to survivor payments.8Internal Revenue Service. Publication 525 (2025), Taxable and Nontaxable Income Colorado does not tax these benefits either. Dependents don’t need to report the payments as income. Retirement plan distributions triggered by the worker’s death follow different rules.
Lawsuits Against Someone Other Than the Employer
Workers’ compensation is the exclusive remedy against the employer. Survivors cannot sue the employer in civil court for the same work-related death.9Justia. Colorado Revised Statutes Section 8-41-102 (2021) – Liability of Employer That shield covers the employer only. If someone else contributed to the death, such as a manufacturer of defective equipment, the driver of another vehicle in a work-related crash, or a property owner who kept a jobsite in unsafe condition, survivors can bring a wrongful death lawsuit against that third party and still collect workers’ compensation. A third-party case can recover damages the comp system doesn’t pay, including pain and suffering and full lost earning capacity. If the lawsuit succeeds, the workers’ compensation insurer may have a right to recover benefits it already paid out of the proceeds.
Social Security Survivor Benefits
Families receiving Colorado death benefits may also qualify for Social Security survivor benefits. The two programs are separate, and drawing one doesn’t rule out the other. There is a federal offset, though: if workers’ compensation combined with Social Security disability or survivor benefits exceeds 80% of the worker’s pre-death earnings, Social Security may reduce its payment. Colorado law protects cost-of-living increases in Social Security survivor benefits from being offset against workers’ compensation death benefits, which preserves the combined value over time.
When It’s Worth Hiring an Attorney
Straightforward death claims often move through without a lawyer. Contested claims are different. When the insurer disputes that the death was work-related, when dependents are fighting over shares, or when payments are being slow-walked, legal help changes the outcome. These fights involve medical evidence, depositions, and administrative hearings, and the insurer will have experienced counsel.
Colorado requires workers’ compensation attorneys to put their fee arrangement in a written agreement.10Justia. Colorado Revised Statutes Section 8-43-403 (2023) – Attorney Fees Many take these cases on contingency, collecting a percentage of what they recover rather than billing upfront, which keeps the door open for a family that has already lost its main income.