What is Temporary Disability

Sunday, March 30, 2003 | 0

The last two articles in this column were about how to value your workers' compensation case. The articles presumed that your case was in a position of settlement.

However, workers' compensation benefits are on-going during (and sometimes after) the pendancy of a claim. One of the most visible, and necessary, benefits is Temporary Disability (TD) indemnity.

There are two types of TD indemnity: Temporary Total Disability (TTD) indemnity, and Temporary Partial Disability (TPD) indemnity benefits. Both are intended to provide some form of income to injured workers who are unable to do their jobs as a result of a work injury until such time as a physician essentially declares that there will be no further significant recovery, or deterioration, from the injury.

All states provide some TD indemnity. However, the rules applicable to when TD is paid, and how much is paid, vary widely between states, but there are some generalities followed by virtually all work comp systems.

TTD is paid when you cannot work at all. TPD is paid when you can do some work. Both benefits are limited in the total amount payable on a weekly basis, and generally are calculated as some percentage of your Average Weekly Wages (AWW).

Some occupations are, by statute, not limited, or injured workers are paid full wages in lieu of a TD benefit - most emergency or law enforcement personnel are an example. Other occupations may be covered by a collective bargaining agreement where the union has negotiated something different than the state TD law prescribes.

Most states also have laws providing that if the employer has alternative or modified work available to you, and your doctor says it is okay for you to do that work, then TD is not available.

Federal tax code says that if income is compensation under a workers' compensation system it is not taxable for Federal Income Tax purposes. That is one of the reasons why most state TD benefits are paid as a percentage of wages, typically two thirds.

Most states also put a cap on the maximum weekly amount of benefits that can be paid. The purpose is to discourage people from taking vacations on the work comp system - in other words to make it more attractive to work than be on disability.

This of course is not comforting to those who cannot work, and whose monthly expenses exceed the maximum TD benefit available. Some are tempted to perform some other type of work while also receiving TD benefits in order to make ends meet - in short, don't do it - it is a felony and punishment can be severe. Most prosecuted injured worker fraud cases are where a person has certified that they cannot work and are collecting TTD, all the while working some other job. Bottom line - it is illegal to work AT ALL and collect TD.

Most work comp systems require the insurance company or claims administrator to send various notices to keep you apprised of what is going on with your benefits. Sometimes these notices seem almost illegible due to the use of workers' compensation vernacular, but basically the kinds of notices you can expect to see are:

1. A notice that tells you your TD is starting, at what rate, and how that rate was calculated;
2. When benefits are being held up, the reason for the delay;
3. If the rate changes, why the change was made; and
4. When benefits are ending, and why.

Most state systems also have strict time limits that the claims administrator must follow, and delays or failures regarding such time limits will subject the claims administrator to penalties or sanctions, sometimes substantial amounts.

TD ends after a doctor says that you are not going to get appreciably better or worse - in work comp parlance this is known as a "permanent and stationary", or P&S, status. This is typically followed by a determination as to your permanent disability status.

Is it better to work or get TTD? Most attorneys that represent injured workers recommend that you perform some work rather than collect TTD so long as your doctor approves of the work as consistent with physician proscriptions. Not only can you typically earn more working than collecting TTD, but you will also have a greater sense of self and purpose in life. Each situation must be evaluated on a case-by-case basis, but if an employer has alternative or modified work available then most often it makes sense to take the job.