Minnesota Benefits Deduction Rule: No-Fault Comes Off First

By the FigureMyTax Editorial Team · How we calculate

In a Minnesota negligence action, the court deducts from any recovery the value of basic or optional economic loss benefits paid or payable, or payable but for a deductible. If you are at fault, that deduction is made before your damages are reduced for your fault.

The rule

Minn. Stat. 65B.51, subd. 1 says the court shall deduct from any recovery the value of basic or optional economic loss benefits paid or payable, or which would be payable but for any applicable deductible. Where the claimant is at fault under section 604.01, the deduction for basic economic loss benefits must be made before the claimant's damages are reduced.

A worked example

Suppose your damages are $81,000 and no-fault benefits are $23,000. With no fault on your part, the court deducts $23,000 and awards $58,000, and you keep the $23,000 of benefits too. With 40 percent fault, the court deducts first ($58,000) and then reduces it to $34,800, so you receive $34,800 plus the $23,000 of benefits, rather than losing 40 percent of the whole claim. The Minnesota no-fault calculator applies this order.

Limits of the deduction

Because only benefits paid or payable are deducted, economic loss above the benefit limits remains in your claim (subdivision 2). See what the benefits cover and the tort threshold.

Fault and deadlines

Contributory fault bars recovery only if it is greater than the fault of the person sued (Minn. Stat. 604.01, subd. 1), and the limitation period for an injury to the person not otherwise enumerated is six years (541.05, subd. 1).

Other claims on a settlement

Health plans, Medicare and Medicaid may have separate rights; see Minnesota medical liens and Minnesota attorney fees.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Minnesota's rules apply to your specific case with a licensed Minnesota attorney.