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Temporary Partial Disability – Misunderstood Benefit

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Temporary Partial Disability

The Workers Compensation benefit Temporary Partial Disability (TPD) is likely one of the more misunderstood benefits.  A quick review  of the three main types of paid disability benefits under WC are:

picture of temporary partial disability Man Working
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  • Temporary Total – paid when a workers is completely out of work, usually at 2/3 of the established average weekly wage before the injury.  This benefit may switch to Permanent Total in certain cases.
  • Permanent Total – the injured employee  is deemed as never able to return to their prior job.  Permanent total benefits may not have a cap in certain states.
  • Permanent Partial– a benefit paid when an injured employee loses partial use of a body part such as a hand or eye.
  • Temporary Partial – 2/3 of the difference between the average weekly wage and the current wage the employee is now earning after a return to work.

Most states have caps on one or more of the above types of benefits.

Handicap Sticker Temporary Partial Disability On Windshield
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Temporary partial disability benefits can be difficult to track and pay an injured employee as the employer has to submit the wages earned each week and the adjuster has to make a calculation similar to  (Pre-injury Average Weekly Wage – Post Average Weekly Wage) * 2/3 = TPD.

The calculation is not that difficult.  Monitoring the payment and then relying on the insured to provide the reduced wage figure each week can be tedious for all parties.   An adjuster may have multiple injured employees on TPD at the same time.

Injured employees almost always do not earn the same amount of wages each week.   The worst case scenario is TPD being paid incorrectly for a number of weeks.   Refiguring the  TPD benefits can be a very cumbersome corrective action.

TPD benefits are federally tax-free as are all  WC benefits.  Each state is very specific how TPD is calculated and paid for the reduced wages.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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