Permanent partial disability benefits are calculated by assessing the nature of an injury and the extent of a worker’s impairment caused by the injury.
Permanent Partial Disability Benefits
Workers’ compensation insurance covers employees for all job-related injuries and occupational illnesses or diseases. In Illinois, the Illinois Workers’ Compensation Commission assesses all workers’ compensation claims and injuries. Permanent partial disability (PPD) claims are the most common type of claim filed for workplace injuries. PPD benefits are usually paid after a worker has reached maximum medical improvement. The decision to pay PPD benefits depends on state laws since workers’ compensation insurance is a state-run program. The determination for permanent disability or impairment must be made by a licensed medical professional.
In Illinois, employers are required to pay permanent partial disability (PPD) benefits to injured workers suffering from an amputation, physical impairment, or disfigurement caused by job-related injuries, but is able to perform work at some level. Permanent total disability (PTD) benefits are paid to injured workers who are permanently disabled and no longer able to work in any capacity. After a workers’ compensation claim has been filed and accepted by the state, PPD benefits are paid to the injured worker in either a lump sum or installment payments, depending on the worker’s preference. If the worker chooses installment payments, they are typically paid until the worker reaches age 70. If a lump sum payout is chosen, certain restrictions apply to benefits.
Calculating PPD Benefits
In Illinois, the Workers’ Compensation Commission (IWCC) uses four methods to calculate permanent disability benefits: Wage Differential; Scheduled Injury; Percentage of Loss; and Degree of Disfigurement.
When an injured worker is forced to change jobs due to physical impairments caused by work-related injuries or occupational illness or disease, his/her new wage is compared to the old wage. If the new wage is less than the old wage, a worker is entitled to a wage differential. The worker can collect 66 2/3% of the wage difference between the two jobs. In 2018, the maximum wage differential was set at $1,080 based on the state’s average weekly wage. According to Workers’ Compensation state laws, a worker is not allowed to collect permanent partial disability benefits and a wage differential.
Based on the specific body part impairment, IWCC sets a certain number of weeks for benefits for 25 different body parts. To calculate PPD benefits, the number of weeks is multiplied by 60% of the state’s average weekly wage. The maximum number of weeks correspond with the physical loss (amputation) or the permanent impairment of the specific body part. Scheduled injuries include amputation or permanent impairment of the following:
- Thumb – 76 weeks
- Hand – 205 weeks
- Arm – 253 weeks
- Leg – 215 weeks
- Foot – 167 weeks
- Eye – 162 weeks
This is only a partial list of impairment losses. The complete list includes various other body parts, as well as hearing loss in one or both ears. Typically, the loss of soft tissue does not qualify for scheduled injuries under PPD benefits.
Some of the most common workplace injuries and occupational illnesses and diseases are not calculated under the scheduled injury method. Injuries to the head, neck, back, spine, and internal organs, as well as occupational diseases like carpal tunnel syndrome, are not listed under scheduled injuries, so PPD benefits are calculated differently.
Percentage of Loss
For unscheduled injuries not on a list, PPD benefits are calculated based on the percentage of loss. For these type of permanent impairments, the IWCC assesses a worker’s age, occupation, skill, pain, limitation of motion, and ability to perform certain tasks. The Commission evaluates the degree of a worker’s physical impairment and the effect of the disability on his/her life and earning potential. The percentage of loss is multiplied by the number of weeks allowed for PPD benefits. The number of weeks is then multiplied by 60% of the worker’s average weekly wage.
Degree of Disfigurement
When a worker suffers a physical disfigurement to the head, face, neck, chest, hands, arms, or lower legs from a work-related injury, PPD benefits are calculated based on the degree of disfigurement. Physical disfigurement includes cuts and abrasions, burns, scars, skin grafts, and loss of skin tissue.
To calculate PPD benefits for disfigurement, the employer and the employee must establish a number of weeks for benefits. If they can’t agree, an IWCC arbitrator will establish a set number of weeks with a maximum of 162 weeks. The established number of weeks is then multiplied by 60% of the worker’s average weekly wage. According to Workers’ Compensation state laws, a worker is not allowed to collect PPD benefits for disfigurement and the loss of use of a body part under scheduled injuries.