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Workers' compensation -- Disability benefits:  Permanent total disability (PTD)

Permanent total disability (PTD) is payable to employees who are never able to return to gainful employment. The PTD rate is usually calculated using the same method as TTD and is subject to the maximum rate as TTD but not the same minimum rate. In addition, if an employee was a part-time worker, the compensation is computed based upon a normal work week for that occupation. See Minnesota Statutes 176.011, Subd. 18 for more information.

Statutory language

 

176.101 Compensation Schedule (1995)
Subd. 5. Definition.

(1) the total and permanent loss of the sight of both eyes, the loss of both arms at the shoulder, the loss of both legs so close to the hips that no artificial members can be used, complete and permanent paralysis, total and permanent loss of mental faculties; or

(2) any other injury which totally and permanently incapacitates the employee from working at an occupation which brings the employee an income, provided that the employee must also meet the criteria of one of the following clauses:

(a) the employee has at least a 17-percent permanent partial disability rating of the whole body;

(b) the employee has a permanent partial disability rating of the whole body of at least 15 percent and the employee is at least 50 years old at the time of the injury; or

(c) the employee has a permanent partial disability rating of the whole body of at least 13 percent and the employee is at least 55 years old at the time of the injury, and has not completed the grade 12 or obtained a GED certificate.

For employees who are statutorily declared to be permanently totally disabled, per clause (1) above, the insurer is obligated to continue payment of PTD benefits even if the employee is able to return to work.

Reduction of benefits

When an insurer has paid $25,000 in PTD benefits to the employee, the weekly workers' compensation benefits can be reduced by the amount of disability benefits being paid by certain government disability programs, including old age and survivor's benefit programs. The benefits paid by the government disability program must be as a result of the injuries sustained in the workers' compensation injury.

For example, an injured employee is receiving Social Security disability benefits as a result of back problems due to a work injury and VA disability benefits due to a knee injury occurring prior to the work injury. Only the Social Security benefits can be used to reduce the weekly PTD benefits.

Injuries prior to Oct. 1, 1995

The laws prior to Oct. 1, 1995, had basically the same language, noted in clause (1) above, for statutory permanent total injuries. However, for any other injuries that led to PTD benefits, the threshold requirements in clause (2) did not exist. For those injuries, the requirements were generally that the employee's physical condition, in combination with age, training and experience, and the type of work available in the geographical area produces no or only sporadic employment resulting in insubstantial earnings. Benefits are payable during the lifetime of the employee.

The compensation rate is two-thirds of an employee's gross weekly wage at the time of the injury, subject to the same maximum as TTD. The PTD rate may be eligible for annual cost of living adjustments depending on the law in effect on the date of injury. (See Annual adjustment of benefits.) In addition to the PTD payable, employees may be eligible for supplementary benefits (SB) in certain situations. SB can be payable when the employee has been paid a certain number of weeks of PTD or when it is a certain number of years after the injury, whichever comes first, if the current PTD rate (after any offsets noted above) is below the current SB rate. Since SB were implemented in 1972, the qualifying number of weeks and years needed for the employee to be eligible for SB has changed a number of times. Refer to the law in effect on the date of injury for the specific criteria. Also, the amount of SB payable may be reduced by five percent if the SB are payable because of the offset noted above. The 5-percent reduction only applies if the other government disability program is Social Security disability benefits, not if it is Social Security old age or survivor's benefits or any other government disability program. In most situations, any SB paid were reimbursed to the insurer by the Special Compensation Fund upon the filing of an annual claim for reimbursement form by the insurer.

The following table gives three examples of how weekly amounts of PTD and SB may be calculated.

PTD rate as
of
Oct. 1, 2006
Weekly
Social
Security
Adjusted
PTD rate
SB rate as of
Oct. 1, 2006
SB due
SB due minus
5 percent
PTD plus
SB due

$650

$100

$550

$509

$0

$0

$550

$650

$200

$450

$509

$59

$56.05

$506.95

$650

$200

$450

$509

$59

 

 

In the first example, the employee was not eligible for SB as the adjusted PTD rate, after offset for Social Security, was not below the SB rate at that time. The only difference between the second and third examples is the 5 percent offset of SB.

Note:  The amount of weekly benefits (PTD plus SB) payable to the employee can change several times during the year as the effective dates of Social Security increases, annual adjustments to the PTD rate and the annual change in the SB rate may occur on different dates during that year.

Injuries on and after Oct. 1, 1995

For injuries on and after Oct. 1, 1995, except for the instances where the employee qualifies for statutory PTD benefits as noted in clause (1) above, an employee may only be considered to be PTD if the threshold criteria regarding age, level of physical disability and education are met. Training, experience and the type of work available in a geographical area are only considered if the employee meets the threshold criteria. In addition, PTD benefits end at age 67, when the employee is presumed to be retired. The employee can rebut the presumption of retirement.

The PTD rate is two-thirds of an employee's gross weekly wage at the time of the injury, subject to a maximum weekly compensation for TTD. Employees are no longer eligible for SB; however a minimum PTD rate equal to 65 percent of the statewide average weekly wage was added to the law. The 65 percent of the statewide average weekly wage is the same as the SB rate (for older dates of injury). So, in simple terms, the minimum initial PTD rate an employee could receive is the SB rate on the date of injury. The PTD rate would be eligible for cost-of-living adjustments as of the fourth anniversary of the injury. (See Annual adjustment of benefits for more information.) The PTD rate could be reduced by the amount of disability benefits being paid by certain government disability programs when $25,000 in PTD benefits have been paid to the employee.

The following table gives two examples of how the minimum PTD rate (SB rate) would or would not apply. In both situations, the date of injury is Oct. 1, 2006.

Employee's
weekly wage
Two-thirds of
weekly wage
Minimum PTD
rate (SB rate)
Initial PTD
rate paid
$600 $400 $509 $509
$900 $600 $509 $600

Threshold criteria
Other than loss of both arms, legs, vision in both eyes, complete paralysis or permanent loss of mental faculties, the employee must meet one of the following criteria before a determination regarding PTD can be made:

  • Must have a 17 percent PPD rating of the whole body.

  • Must have a 15 percent PPD rating of the whole body and be at least 50 years old at the time of the injury.

  • Must have a 13 percent PPD rating, be at least 55 years old at the time of the injury, and have not completed the 12th grade or obtained a GED certificate.

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