Workers’ Compensation Final Benefits
Illinois Workers’ Compensation Explained
Chapter 8 – Permanent – Final Benefits
This chapter discusses what benefits an injured worker may be entitled to for permanent disability. Permanent disability benefits take two forms, either Permanent Partial Disability (PPD) or Permanent Total Disability (PTD). Other permanent, final benefits, may be awarded instead of PPD or PTD benefits, those being benefits for Decreased Earning Capacity or Disfigurement.
Once an employee has reached maximum medical improvement and all of the interim temporary benefits have had the opportunity to resolve, an injured employee is then entitled to compensation for any permanent disability that has resulted from their injury. Which benefit may be applicable will depend upon the degree of permanent disability.
As is true with the temporary benefits, the basis for payment of permanent benefits is dependent on the employee’s average weekly wage. We provided a full discussion about how to compute the of average weekly wage some time ago. You can read about how it should be calculated in our post Average Weekly Wage (AWW) – The Basis for Workers’ Compensation Benefits
As with the temporary disability benefits, there are minimum and maximum benefit rates that are applicable. Find the current minimum and maximum rates.
Finally, please note that if an employee has received a previous settlement or award for an injury to the same extremity (not including body as a whole settlements or awards) the employer is entitled to credit for the prior loss.
1. Permanent Disability Benefits
Permanent disability benefits as well as the other final benefits discussed in this chapter are payable as an approximation of the employee’s loss of earning power. If you would like more information on this, see Industry Can Pay Them Now or We Must Pay Them Later.
A. Permanent Partial Disability (PPD)
The amount of permanent partial disability (PPD) compensation payable is computed by a simple two-part formula. The first part of the formula is the permanent partial disability rate, and the second is the number of weeks of disability.
The permanent partial disability rate is 60% of the employee’s average weekly wage at the time of the injury. The determination of the number of weeks of disability is more complicated.
The Illinois State Legislature has established a schedule for the total number of weeks of compensation for 100% loss of use of various body parts. We don’t post the schedule of benefits because it can be misleading and could cause an employee to accept a lower settlement than they may be entitled to. A few examples as to why the scheduled loss provisions may be misleading to the uniformed would include:
- A person may have an injury to a hand, which is noted in the schedule to be 205 weeks, but in reality, it is only worth 190 weeks if carpal tunnel syndrome was involved and it was caused by repetitive trauma;
- An employee may believe they are entitled to a percentage disability to the body as a whole because of an injury when, in fact, they are entitled to a much better decreased earning capacity award;
- Yet another example would be where an employee sustained an injury to two or more fingers. They could believe that the injury is rated by adding the disability to each finger when, in fact, the injury can be rated on disability to the hand providing a much better result.
When the number of weeks of available compensation has been determined for an injury, say with a low back strain that is rated on the body as a whole maximum of 500 weeks of disability, and you can arrive at a percentage loss of use, say 5%, the calculation of the compensation follows a simple mathematical formula. In this example, 5% of 500 weeks is 25 weeks of compensation at the PPD rate of 60% of the average weekly wage.
B. Permanent Total Disability (PTD)
When an employee is left wholly and permanently incapable of work because of an injury, they are considered to be permanently and totally disabled. They are paid compensation benefits in the amount of 66 2/3% of their average weekly wage. These benefits are payable for the life of the employee or until the disability ceases.
Following a permanent total disability award, the rate of payment will be subject to adjustment, which can be thought of as a cost of living sort of increase, through the rate adjustment fund.
2. Other Final Benefits
A. Decreased Earning Capacity
If, because of an injury, an employee is no longer capable of earning the same wages they were earning at the time of their injury, the employee has the option of pursuing disability benefits for either PPD disability or for their decreased earning capacity. Generally speaking, where the loss of earning capacity is relatively small it is normally felt that pursuing PPD disability will be more beneficial. The greater the wage difference the more likely pursuing disability for decreased earnings will yield the better result. As you will see below, the age of the employee also has a bearing on whether an employee might want to pursue compensation for their decreased earning capacity.
Compensation for decreased earnings is paid, not (necessarily) based on the average weekly wage, but rather based on 66 2/3rds of the wage difference between what the employee was capable of earning before the injury when compared to what they are capable of earning at the present time. Such benefits are payable for as long as the decreased earning capacity continues, for a minimum of 5 years and up to a maximum of age 67.
B. Disfigurement
An employee may be entitled to compensation for disfigurement if an injury, or the necessary medical treatment to treat the injury, results in permanent disfigurement.
Not all disfigurement is compensable. Section 8(c) of the Act provides:
“For any serious and permanent disfigurement to the hand, head, face, neck, arm, leg below the knee, or the chest above the axillary line [armpits], the employee is entitled to compensation for such disfigurement, the amount determined by agreement at any time, or by arbitration under this Act, at a hearing not less than six months after the date of the accidental injury, which amount shall not exceed 150 weeks at 60% of the average weekly wage.” 820 ILCS 305/8(c)
An employee is not normally entitled to compensation for disfigurement and other benefits for disability to the same part of the body.
There are occasions where disfigurement can also cause disability. As an example, a serious scar can restrict the movement of an extremity. The scar itself could be rated on the basis of disfigurement or PPD disability because of disability to the extremity caused by the scaring.