Many employees who are injured at work get immediate medical treatment and go on to fully recover. Workers' comp will cover their medical bills and perhaps pay for a few days or weeks off work. However, some employees suffer permanent and lasting effects from their work injuries. For these employees, workers' compensation also pays permanent disability benefits.
Eligibility for permanent disability benefits is determined by a workers' compensation doctor. At some point during your treatment, your treating doctor will determine that your condition has improved as much as it’s going to. In most states, this critical point is called reaching "maximum medical improvement" or MMI.
Once you reach MMI, your treating doctor will perform an examination to determine whether your injuries have left you with any permanent restrictions or limitations. For example, suppose you suffered a tear in your shoulder after years of lifting heavy equipment at work. Even after surgery and physical therapy, you can’t rotate your shoulder completely or lift anything heavier than 20 pounds. Your doctor will assign you a disability rating, stated as a percentage, which represents the degree of permanent limitation you’ll have in your shoulder.
Depending on your state’s laws and the nature of your injuries, your doctor might give you a whole person impairment rating instead. This is commonly done when the injury involves the back, head, neck, organs, or internal systems. For example, a coal worker who is significantly limited in his or her respiratory function due to black lung disease might receive a 40% whole person impairment rating. (For more on this topic, see our article on how permanent disability ratings work.)
Permanent disability benefits are often the most complicated workers’ comp benefits to calculate. Each state uses its own method for determining the amount of benefits, which often depends on whether the disability is partial or total and whether it’s scheduled or unscheduled.
In most states, a permanent and total disability is one that prevents the employee from working in any kind of gainful employment ever again. This category is reserved for only the most serious and debilitating conditions—such as total blindness or the loss of both arms or legs. Permanent total disability benefits are usually paid at the same rate as temporary total disability benefits, for the rest of the worker’s life. (To learn more, see our article on how much you might receive in workers’ comp benefits.)
All other permanent disabilities are considered partial disabilities. In most states, permanent partial disabilities are either scheduled or unscheduled.
A scheduled loss is one that appears on a list in the state’s workers’ compensation laws. State schedules usually encompass disabilities of the extremities—usually broken down by fingers, toes, hands, feet, arms, legs, eyes, and ears. Each body part is then assigned a number of weeks’ payment (or, in a minority of states, an actual dollar amount). In most states, the number of weeks is then multiplied by the worker’s disability rating.
For example, suppose the state schedule assigns 75 weeks of benefits for the loss of a thumb. If your doctor gave you a 10% disability rating of the thumb, you would receive benefits for 7.5 weeks (75 x .10). In some states, you will receive your temporary disability benefit rate during this time. In other states, the weekly amount is calculated differently or subject to a lower cap.
In some states, workers with multiple schedules losses can receive separate awards for each. In other states, multiple disabilities would be treated as an unscheduled loss and calculated as a whole person impairment (see below).
An unscheduled loss is one that doesn’t appear on the state’s list and is usually more complicated to calculate. Some states compensate these disabilities using a whole person impairment-based approach. For example, a 100% whole person impairment might be worth 350 weeks. If you received a 50% whole person impairment rating for a back injury, you would receive benefits for 175 weeks.
Other states don’t use an impairment-based approach for unscheduled losses. Some of these states measure the worker’s actual wage loss due to the impairment, by comparing what the worker made before and after the injury. Other states measure the worker’s loss of future earning capacity, considering several factors, such as the workers’ age, education, and training.
It’s important to note that every state has different workers’ comp rules, so your state may have some variation of the rules above or may combine approaches. To learn about the specific rules in your state, see Nolo's state-specific articles on workers’ comp benefits. Or, contact your state workers’ compensation agency or a workers’ compensation lawyer.