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When you are injured or experience an illness on the job, it can cause a significant disruption to your life and finances. Fortunately, workers’ compensation wage replacement benefits exist to get the help to those financially affected during these times.
Whether you need temporary or permanent benefits, this type of compensation can assist with medical expenses and lost income due to a work-related injury or illness.
Let’s take a generalized look at workers’ compensation so you can determine your eligibility and what to expect during the process.
Types of Benefits Available
Workers’ compensation benefits can help to cover work-related injuries or illnesses. Often, this will include medical expenses, such as treatments, doctor visits, hospital stays, surgeries, medications, and rehabilitation.
Temporary partial disability benefits or temporary total disability benefits provide compensation to partially replace lost wages during recovery. In addition, there could be compensation for loss of earnings if light-duty work at a lower wage is offered due to the injury.
Workers’ compensation also provides vocational rehabilitation. This helps individuals who need to return to work or find alternative employment, especially if the injury affects their ability to work their previous jobs.
Also, workers’ compensation offers permanent disability benefits. Depending on the severity of the injury or illness, these may be either permanent partial disability benefits or permanent total disability benefits.
Unfortunately, injuries can lead to fatal work-related incidents. Workers’ compensation also includes death benefits to support surviving dependents in these cases. Often, this support provides costs for funeral expenses with ongoing financial assistance.
You will know which benefits are available to you by checking out your state’s workers’ compensation guidelines.
What Is the Eligibility and Waiting Period?
Unfortunately, workers’ compensation benefits will not automatically start. You will need to take a few steps to begin the process. First, you must report the incident, get medical assistance, and have your employer fill out any necessary paperwork.
However, there are other criteria to qualify for these benefits. Workers’ compensation benefits are only available for those who suffered a work-related illness or injury during their course of employment.
Along with that, you must be a verified employee of the company. Independent contractors, freelancers, or volunteers are not eligible for the benefits. However, if this individual purchased their worker’s compensation policy, they could qualify for benefits.
In these cases, the benefits will not automatically start. In many places, you will need to have missed a few days of work due to illness or injury. Generally, these benefits will not begin until you have been off work until the seventh day after the injury. Remember that during this waiting period, you will not receive any benefits.
While the specifics may vary by state, some of these general conditions could apply to your claim.
What Determines My Income Amount?
If you need to take time from work to recover from your injury, you will likely be eligible to receive compensation for the income lost. In these cases, it will cover a specific percentage of your wages, often anywhere from 60-75% of your average weekly wage before the injury.
However, the amount will depend on your state. Your state’s legislature determines the minimum and maximum payouts. Along with that, your pay schedule may change as well. In most states, these checks are mailed out twice a month to recipients.
If you are receiving this benefit, you may need to continue to be certified by a health care provider, documenting that your injury or illness prevents you from working. In the event that you fail to receive treatment or do not communicate with your doctor, you could lose your benefits.
Additionally, you will have to remember that you might have to pay taxes on these benefits. When you receive the benefits, no taxes are withheld. While workers’ comp is usually not taxable, if you receive these benefits and Social Security Disability Insurance (SSDI), you cannot exceed a certain threshold (usually 80% of your pre-injury wages). Keeping track of your obligations can help you prevent any surprises when it comes time to paying your taxes.
What Happens If I Cannot Return to Full Capacity?
According to the Social Security Administration, temporary partial disability benefits account for the more than one-half of all workers’ comp cases. If you have suffered an illness or injury but cannot return to your full earning potential, you may still qualify for workers’ compensation benefits. In these cases, you will have a loss of earning capacity and could receive permanent partial disability benefits.
In these cases, your employer can offer light-duty work at a lower wage due to an injury. The injured party often takes an alternative job, even if it pays less than their pre-injury wage. However, permanent partial disability benefits can help to cover the difference between the individual’s pre-injury earning capacity and their current reduced capacity.
Keep in mind that some of these processes will depend on your state, but typically, you will need to be assessed to determine your earning capacity. After that, your benefits are calculated to cover the gap between your previous and current earnings.
In some scenarios, these benefits will continue until you reach the maximum medical improvement (MMI) or you have the ability to boost your individual’s earning capacity.
These benefits help individuals who have suffered an injury and experienced a loss of earnings receive the support they need to bridge the gap between their pre-injury and current earning capacity.
What Happens If I Cannot Return to Work?
Reaching MMI is a factor in obtaining permanent disability benefits. In most cases, your treating doctor determines MMI with a thorough medical assessment. After reaching MMI, you will receive a permanent disability rating, which helps to qualify you for permanent benefits. This rating considers factors such as:
- The extent of damage
- Available treatments
- Overall health
If you cannot return to work, then you may qualify for these benefits that would cover your potential lifetime earnings. Once again, keep in mind that specific rules and processes for workers’ compensation vary by state.
The world of workers’ compensation can take time to understand, especially with the complexity of wage replacement benefits. With these benefits, you can get a financial lifeline when recovering from an illness or injury. In turn, you can focus on your health without any financial stress.
