How Are Workman Compensation Settlement Amounts Determined?


Quick Answer

Workers' compensation settlements are calculated based on whether the work-related injury caused permanent partial disability, permanent total disability or temporary partial or total disability, explains Nolo. Partial disability awards are determined by the percentage of impairment. Total disability awards compensate the injured party for the inability to perform any work.

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Full Answer

For example, in a case of permanent total disability, a life-long pension is the typical remedy because the individual has lost the ability to earn any money for life, according to Nolo. Individuals faced with permanent total disability should seek qualified legal council to negotiate their settlements. In contrast, a worker who suffers permanent partial disability receives a settlement amount according to the percentage of impairment suffered. Each state uses its own impairment percentage table, which illustrates the percentage of impairment for most work-related injuries. If the individual is considered 40 percent impaired, he receives 40 percent of his pre-injury income until retirement.

Temporary disability settlements depend on how long the individual is out of work or impaired, states Nolo. Individuals who are totally disabled receive a settlement equivalent to full wages for the period of total disability, while those who are temporarily disabled receive the impairment percentage that corresponds to their injury. Medical expenses are also a factor in all workers' compensation settlements.

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