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:
- 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.
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.
©J&L Risk Management Inc Copyright Notice