Income Replacement Benefits: I

Summary

The chapter provides information on two types of cash benefits provided by workers’ compensation program: Temporary Total Disability (TTD) benefits and Permanent Total Disability Benefits (PTD). (Two other types of cash benefits are discussed in Chapter 9). The Information on Cash Benefits Calculation include (1) the effect of waiting periods, the statutory (nominal) replacement rate, and maximum weekly benefits on the adequacy of temporary total disability (TTD) benefits (with data on TTD benefits for all states), and (2) the effect of the nominal replacement rate, maximum weekly benefits, and duration limits for benefits on the adequacy of permanent total disability (PTD) benefits. Appendix A: Limit Factor Calculations explains the effect of minimum and maximum weekly benefits and other factors on the amounts of disability benefits received by workers. Appendix B: Temporary Total Disability Wage Loss Calculations provides state data on the percent of lost wages replaced by temporary total disability benefits. Appendix C: Spendable Earnings explains the recommendation of the National Commission on State Workmen’s Compensation Laws that cash benefits should replace 80 percent of spendable earnings rather than 66 2/2 percent of gross wages.

C. Arthur Williams and Peter S. Barth, “Income Replacement Benefits: I,” Chapter 8 in Compendium on Workmen’s Compensation (Washington, DC: National Commission on State Workmen’s Compensation Laws, 1973.)