If you are injured at work and do not completely recover, you are entitled to permanent disability benefits. In personal injury law, this is often referred to as "lost earning capacity."
California permanent disability pays you money for the loss of future earnings due to your permanent injury.
These benefits are:
- Based on a medical evaluation of your injury
- Modified based on the type of work you do, and your age and occupation
- Determined on a scale from 0 to 100%
- Paid on a set schedule
There are specific steps you can take if you believe your permanent disability benefits have been unfairly denied or limited.
In this article, our California personal injury attorneys will explain:
- 1. What is California permanent disability?
- 2. How is California permanent disability calculated?
- 2.1 Medical Evaluation for Impairment
- 2.2 Conversion into permanent disability
- 2.3 Determination of dollar value of California permanent disability
- 3. When is permanent disability paid?
- 3.1 When you return to work
- 3.2 When your condition stabilizes
- 3.3 From a decision by a judge
- 3.4 Late payments of permanent disability
- 4. What if there is a dispute regarding permanent disability?
- 4.1 You disagree with the doctor's disability findings
- 4.2 You disagree with another factor in the rating
- 5. What can I do to get the right level of permanent disability?
Permanent disability pays you for your loss of future earning capacity due to the permanent effects of your injury.1 2
Note: Temporary disability in a workers comp case is a separate benefit that compensates you for your lost wages while you are being treated for your injury.
Permanent disability is calculated as a percentage of your ability to compete in the open labor market.3 It is rated on a scale from 0 to 100%.
Payments of permanent disability are made every two weeks.4
If your disability rating is under 100%, you are partially disabled.5 You will be entitled to weekly payments at a set amount. The higher your disability rating, the more weeks you will be paid. This also means the higher the rating, the more total money you will collect.
If you are 100% disabled, you have permanent total disability.6 In this case, you are entitled to weekly payments at your temporary disability rate for the rest of your life.7
If your disability rating is between 70% and 99% you are also entitled to a life pension.8 After you have received all your weeks of payments for your disability, you will get an additional amount for the rest of your life due to your higher level of disability.
The calculation of permanent disability is based on the percentage of your injury along with a certain dollar value and paid over a number of weeks.9
A permanent disability rating begins with a doctor determining a rating for each part of your body that was injured at work.
The doctor makes this rating based on The AMA Guides, 5th Edition. This book provides a method for rating each part of the body based on the doctor's evaluation and other medical information such as an MRI.
The rating they come up with is considered your “whole person impairment”.
Example: Brandon injured his low back at work. His doctor takes measurements of Brandon's ability to move his low back, considers his pain level, and reviews his MRI results. Based on this information, the doctor writes a report that says Brandon has 8% whole person impairment.
Once a doctor gives you a whole person impairment percentage, it is converted into a permanent disability value.
The medical evaluation just determines your physical impairment and how your injury affects your ability to take care of yourself, which is referred to as “activities of daily living”.10
But permanent disability is meant to pay you for your loss of ability related to work. To come up with this percentage, the injury type, job type, your age, and the change in your future earning capacity are all considered.11
This is done in the following steps using the Permanent Disability Rating Schedule (PDRS).
The whole person impairment rating is then adjusted based on a factor set by the Department of Industrial Relations that increases it by 40%. This converts the medical level of impairment to a level of impairment related to work.
For example, if your doctor gives you 10% whole person impairment, it is increased to 14%.
That percentage is then adjusted based on your job and the part of your body that's injured. Some injuries might make you worse off due to the type of work you do. If you spend all day on the computer, an injury to your hands is worse than one to your legs. However, if your job requires you to walk around all day, an injury to your legs will affect you more.
Finally, your age at the time of injury is considered. The older you are, the less likely you will be able to train for another career. Therefore, you are considered more impaired.
Example: Andy is a nurse. He injured his neck in 2016 trying to help a patient out of bed. He was 35 years old when he was injured. His doctor decides that Andy's neck injury is considered 5% whole person impairment.
From this information, you can determine Andy's permanent disability using tables in the PDRS. Using this, the conversion of rating from a medical rating to work rating is:
15.01.01.00 – 5% – 7% – 311G – 8% – 7%
The 15.01.01.00 is a code that tells you it's a neck injury. The whole person impairment calculation is increased by 40%, therefore up from 5% to 7% to convert the medical impairment to a work impairment.
The 311 code tells you Andy is a nurse and the G tells you how significant a neck injury is for Andy to be able to do his job as a nurse. Using a chart in the PDRS, this then causes the rating to go up from 7% to 8%.
Finally based on Andy's age of 35, the rating goes down one point. Andy is young enough that he can get other comparable work, so the injury doesn't affect him as much as someone that is older, bringing his whole person impairment rating back down to 7%.
Once you have the rating, it must be converted into a dollar value.
Just as your temporary disability rate is determined by your average weekly wage, your rate of permanent disability is also determined by taking two-thirds of the average weekly wage.12
The weekly rate of payment for permanent disability is much lower than for temporary disability. It varies based on changes in the state's average weekly wage. Since 2014, the maximum permanent disability rate is $290 per week. 13
Example: In the example above, Andy had 8% permanent disability. Based on Andy's earnings, he gets the maximum permanent disability rate of $290 a week. Using Labor Code § 4658, Andy gets three weeks of payments for each percentage point of disability totaling $6,960 in permanent disability benefits.
Permanent disability cannot be paid while you are receiving temporary disability.
If an injury causes you to be permanently disabled, you should receive the first permanent disability payment within 14 days after you receive the last payment of temporary disability. Even if the insurance company does not know the amount of permanent disability, they should estimate it and make payments on that amount.14
However, if at the end of receiving temporary disability you are offered work that is at least 85% of your prior salary, the insurance company can delay paying permanent disability until the case is over.
At some point, your doctor will state that you have reached Maximum Medical Improvement. This means that further treatment will not make you any better and whatever your condition is at this point is the best it's going to get.
Since your condition has stabilized, the doctor can determine your level of disability.
In a situation where you and the insurance company cannot agree on the value of permanent disability, you can have a judge hear your case.
You can testify about your injury and the judge will review medical reports and records and decide as to your level of disability.
If your permanent disability workers comp payment is late, the insurance company must pay you a penalty. This amounts to an additional 10%.15
Example: Matt has not received any permanent disability checks for six weeks. He should have been paid $290 a week but the insurance company made a mistake in their computer system and no checks went out. Matt should get the six weeks of payments totaling $1,740 and a penalty payment of $174.
You may believe that your doctor did not provide the correct permanent disability. If that happens, you can request that a different doctor evaluate you and determine your permanent disability status.16
Your medical disability rating is adjusted by several factors. For example, you may disagree with the occupation group the insurance company used in the rating. A different occupation group may increase your rating and the dollar value of what you will receive.
As your permanent disability rating starts with a medical determination, it is important to be evaluated by a fair and neutral doctor.
Selecting the right doctor can be a difficult decision and is often a core piece of knowledge of those who know the system.
It starts with understanding how to file a claim for California workers' compensation benefits.
Signature Fruit Co. v. Workers' Comp. Appeals Bd. (2006) 142 Cal. App. 4th 790, 802
Russell v. Bankers Life Co. (1975) 46 Cal. App. 3d 405, 419
Cal. Lab. Code § 4650(c)
Cal. Lab. Code § 4452.5(b)
Cal. Lab. Code § 4452.5(a)
Cal. Lab. Code § 4659(b)
Cal. Lab. Code § 4659
Cal. Lab. Code § 4658
Andersson et. al., Guides to the Evaluation of Permanent Impairment, 5th Edition (2000) p. 4
Cal. Lab. Code § 4660
Cal. Lab. Code § 4658
Cal. Lab. Code § 4650(b)(1)
Cal. Lab. Code § 4650(d)
Cal. Lab. Code § 4061