Permanent disability benefits are available to California employees who don’t fully recover from their work-related injuries or illnesses. If your medical condition has stabilized and you have any lasting pain or other limitations caused by your injuries, you may be able to receive long-term permanent disability benefits. (To learn about other workers’ comp benefits you can receive, such as medical payments and temporary disability payments, see our article on how workers’ compensation payments are calculated for injured employees in California.)
To be eligible for permanent disability benefits in California, your doctor must write a report saying that your recovery has reached a plateau and that you aren’t likely to get better in the next year, even with further medical treatment. This stage is called “maximal medical improvement” (MMI) or “permanent and stationary” (P&S).
Once you’ve reached MMI, your temporary disability payments will end. If you’ve completely recovered and can go back to work without any limitations, you won’t be eligible for permanent disability benefits. But you may be entitled to compensation if your injury or illness has left you with permanent physical or mental limitations on the work you can do. In workers’ compensation, this is called “permanent disability” (or PD).
The amount of compensation for the lasting effects of your injury or illness depends largely on the extent of your disability. There are two basic categories of PD benefits: total and partial. You may be eligible for total PD only if you aren’t expected to be able to work in any capacity for the rest of your life. Total permanent disability is rare in workers’ compensation cases. With certain severe injuries (like losing sight in both eyes, losing the use of both arms, or total paralysis), the law presumes that the injured employee is totally and permanently disabled (Cal. Lab. Code § 4662). In all other cases, workers may receive these benefits only if their PD rating (discussed below) adds up to 100%.
If you have 100% PD, you’ll be entitled to receive regular payments for the rest of your life in the same amount as your temporary disability benefits: generally, two-thirds of your pre-injury average weekly wage, but with maximum and minimum amounts that are linked to the statewide average weekly wage (and are thus regularly adjusted).
Any permanent disability less than 100% is considered partial disability. The amount of the checks you receive—and the length of time those payments last—will depend on the percentage of your disability (up to 99.75%), referred to as your PD rating. The rules for determining that rating are complicated, but we’ll summarize them below.
The rating process starts with one or more medical reports. Initially, your treating physician will write a report (usually at the same time as the P&S report) that describes any permanent impairments you have as a result of your injuries—meaning how much you’ve lost the normal use of the injured part of your body (or normal psychological functioning). For instance, you could have limited range of motion in your shoulder, reduced grip strength in your hand, or an amputated thumb. Doctors must follow detailed guidelines for describing your impairments.
If you or the insurance company disagrees with the conclusions in this report, there’s a procedure for selecting a qualified medical evaluator (QME) to give another expert opinion on the disputed issues. (If you have an attorney, your lawyer and the insurance company may agree on the selection of a medical evaluator, whose opinion will carry extra weight with a workers’ comp judge who looks at your case.)
The findings in the doctor’s report will then be translated into a rating of your permanent disability—how much the effects of your injury or illness limit the kinds of work you can do. The rating process uses a complex formula (or “schedule”) adopted by the state, which takes into account your age and occupation as well as your physical or mental limitations. Your attorney or the insurance company may ask to have the Disability Evaluation Unit in California’s Division of Workers’ Compensation (DWC) do the rating (called a “summary rating”). This will happen automatically if you don’t have an attorney and saw a QME.
Under workers’ comp, a pre-existing medical condition won’t necessarily keep you from getting benefits if your recent work-related injury or illness aggravated or “lit up” that condition. But when it comes to calculating PD benefits, California requires doctors to “apportion” your permanent disability between the old and new injuries. If possible, the physician’s report must determine what percentage of your permanent disability was a direct result of the work-related injury or illness and what percentage was caused by other factors, including previous injuries (Cal. Labor Code § 4663 (2018).)
Like total PD, the weekly amount of benefits for partial PD will generally be two-thirds of your average weekly wages. But the maximum and minimum amounts are different depending on the date of your injury. For injuries between 2014 and 2018, the minimum is $160 per week, and the maximum is $290 per week.
While the amount of partial PD payments may be similar to the weekly amount of total PD, the big difference is how long you receive those payments. Partial PD payments will last only for a certain number of weeks, based on the date of your injury and your PD rating (see the tables in Cal. Labor Code § 4658). For instance, an employee with a 50% PD rating from a 2017 injury would be entitled to receive the disability payments for 400 weeks. But if that same person had a 20% rating, the payments would last only 100 weeks.
If you have a partial PD rating of at least 70%, you’ll also be entitled to receive much smaller ongoing payments (called a “life pension”) after the regular payments run out. Here again, the amount is based on the date of your injury, level of disability, and pre-injury wages up to a maximum level. For instance, if you were injured in 2016 and have a 70% PD rating, the most you’d receive is about $77 per week, with annual increases tied to the rise in the statewide average wages. (Cal. Labor Code § 4659 (2018).)
With a few limited exceptions, permanent disability benefits must begin within 14 days after your temporary disability payments stop. The insurance company has to pay you at least every two weeks. If it’s late with any payments (whatever the reason), the insurer will automatically owe you an additional 10% of the late amounts. And if the insurer didn’t have a reasonable excuse for the delay, you could be awarded a total of up to 25% of each late payment, to a maximum of $10,000. (Cal. Labor Code §§ 4650, 5814 (2018)).
Because your PD rating plays an essential role in determining the amount of benefits you’re owed, it’s important to understand the rating and challenge it if you think it’s wrong. And because the rating is based on the doctor’s description of your impairments, you should carefully read the medical reports and identify any errors in the description of your injuries, limitations, or complaints about pain, fatigue, or the like. If you disagree with anything in the report, you should promptly let the insurance company know in writing. (Your lawyer must send this letter within 20 days after receiving the report; if you don’t have a lawyer, you have 30 days to send your objection.)
You can also request a reconsideration of the summary rating within 30 days. While it’s theoretically possible to do this on your own (with help from the DWC Information and Assistance Unit), you should know that the PD rating process is very complicated and difficult to understand without the help of a workers’ comp lawyer. Permanent disability benefits are a big expense for insurance companies, and you can be sure they’ll use all of their considerable resources to try to limit your PD rating. An attorney who’s experienced in workers’ comp will understand the process and know the best way to protect your right to the benefits you deserve. A lawyer may also negotiate with the insurance company to reach a settlement of your workers’ comp case, which could include an up-front, lump-sum payment. (Learn more about what a good workers’ comp lawyer should do for you.)
For an in-depth explanation of calculating permanent disability benefits, see California Workers’ Comp, by Christopher Ball (Nolo).