A psychoneurotic reaction following a real or presumed disability which involves the question of financial compensation for injury or disease.Compensation neurosis is a genuine disorder which usually falls into the category of conversion reaction. It may also take the form of anxiety reaction, hypochondriasis, or mixed neurosis. At one time it was thought that the desire for compensation was the principal if not the only factor in these reactions, but personality studies have indicated that suggestibility and the desire for attention or escape from a disagreeable work situation may also play a part. If someone in the family, or even the physician, remarks on how badly the individual looks after the accident, he may become convinced that he is going to be disabled. This conviction may actually aggravate his condition, and at the same time suggest that he has a perfect right to indemnification. At this point the lines between true neurosis, deliberate self- deception, and outright malingering (faking) begin to blur. See IATROGENIC ILLNESS, MALINGERING. This problem becomes even harder to resolve when several further points are taken into consideration. First, compensation neuroses are more likely to develop after slight than after obvious and detectable injuries. Are they exaggerated consciously or unconsciously? Second, accident neuroses rarely occur when the victim must bear the financial responsibility. Third, there is often a considerable time gap between the accident and the appearance of the chronic disability, particularly when suggestion or other emotional factors are involved—and sometimes it does not make its appearance until after the patient returns to his job. Fourth, when the possibility of financial compensation is mentioned, the patient often vehemently denies that he wants it, but at the same time he does not seem vitally concerned about getting rid of his symptoms. Fifth, certain disorders appear to be more prevalent in countries where they are compensable—for example, “writer’s cramp” is compensable in England and seems to occur more often there than in the United States where it is not compensable. Finally, there is little doubt that the present availability of industrial compensation has increased the number of compensation neuroses—that is, cases where no disabling physical injury can be found. These patients are not malingerers, but people who are predisposed to neurotic reactions—and it seems that they are unconsciously encouraged to develop these reactions by the benefits they might receive. On the other hand, it is often found that they recover with startling rapidity once they have received compensation! As a possible way of handling this problem, Dr. Howard Rusk has proposed that insurance carriers pay for rehabilitation and retraining instead of giving the claimant a lump sum. It is hard to make black and white judgments on this whole question since there is undoubtedly a mixture of motives as well as a mingling of different levels of consciousness. This complexity is reflected in the oft-quoted statement that compensation neurosis is “a state of mind, born of fear, kept alive by avarice, stimulated by lawyers, and cured by verdict” (as stated in Hinsie and Campbell, 1960).