How Texas Workers' Compensation Impairment Income Benefits Work
In the Texas Worker's Compensation scheme, Impairment Income Benefits are one of four types of benefits given to injured Texans. The other benefits include Temporary Income Benefits, Supplemental Income Benefits, and Lifetime Income Benefits.
You can read more about the different types in our Income Benefits Overview page.
In this article, our attorneys discuss Impairment Income Benefits, specifically. Workers are eligible for this type of benefits if and only if they have been permanently disabled or otherwise impaired as a result of a workplace injury. So if they make a full recovery from their injuries and are fully functional, they will not be eligible for these benefits.
Before you read about Impairment Income Benefits, it's important to know what Maximum Medical Improvement and Impairment Rating are. These two concepts factor heavily into how Impairment Income Benefits work.
Questions answered on this page:
- What are Texas workers' comp Impairment Income Benefits?
- What is the formula for calculating Impairment Income Benefits?
- Is there a cap on Impairment Income Benefits?
- How can an experienced work accident attorney help you recover Impairment Income Benefits?
What are Impairment Income Benefits
First and foremost, when a worker is injured on the job and can't work, they first receive a class of benefits called Temporary Income Benefits. TIBs are exactly what they sound like: income benefits that are paid for a temporary period of time. Said benefits are paid up to the point that the workers' comp doctor seeing the injured worker determines that the employer has recovered as well as he is going to. In other words, once the doctor decides that the worker has obtained Maximum Medical Improvement, there is a hard stop on the Temporary Income Benefits. Those benefits are shut off, and the question then becomes whether or not the worker is eligible to receive the next class of Income Benefits called Impairment Income Benefits.
Impairment Income Benefits are paid either in a lump sum or are paid out in weekly checks to workers who were determined by their doctor to have a Maximum Medical Improvement that is not very good. In other words, if the worker makes a full recovery, they are not eligible to receive Impairment Income Benefits (they're not impaired). But when the worker is evaluated and determined to have reached Maximum Medical Improvement, if it's determined that they are deficient, then the worker is deemed eligible for Impairment Income Benefits.
How are Impairment Income Benefits calculated?
To calculate how much money a worker who is eligible to receive Impairment Income Benefits should receive, a formula is used. The standard formula is:
0.70(Your Average Weekly Wage) x (3 x Impairment Rating) = amount received
However, if you're a high wage earner, you will unfortunately be subject to a different formula. The idea at work here is that no injured worker can earn more in benefits than what the average Texan earns at their job. So if your wages are higher than the average, the formula substitutes your Weekly Average Wage for the State Average Weekly wage of $895.08 (as of the time of writing... this amount changes over time). Here's how the formula looks with this modification:
0.70(895.08) x (3 x Impairment Rating) = amount received
So, you can estimate what your Impairment Income Benefits will be as long as you know your average weekly wage and impairment rating using these formulas. Remember, you will receive the lower of the two amounts, by law. Since that formula might be a lot to take in all at once, here are some examples to help clarify how it works with actual numbers.
If your Average Weekly Wage is $600 and you are issued an Impairment Rating of 10%, your IIB pay would be calculated like so:
0.70($600) x (3 x 10) = $12,600
If your Average Weekly Wage is $1,200 and you are issued an Impairment Rating of 10%, your IIB pay would at first appear to be calculated as such:
0.70($1,200) x (3 x 10) = $25,200
But since $25,200 is more than the amount calculated based on State Average Weekly Wage, you would be paid for the lesser amount, as seen below:
0.70($895.08) x (3 x 10) = $18,796.68
So, the maximum benefit for 10 percentage points of impairment will be $18,081, full stop. In theory, the more impaired you are, the larger your benefit becomes, still chained to the state's average weekly wage.
How do Impairment Income Benefits work?
Simply put, IIBs begin the day after an injured worker has reached Maximum Medical Improvement. This type of income benefit is one of three that replace the Temporary Income Benefit, which is only in effect while someone is working towards the goal of obtaining Maximum Medical Improvement.
In fact the Texas Labor Code in Section 408.101 says exactly that:
IMPAIRMENT INCOME BENEFITS.
- (a) An employee's entitlement to impairment income benefits begins on the day after the date the employee reaches maximum medical improvement...
IIB can be paid in a lump sum, where the injured worker gets the maximum amount of compensation at once, or they may receive them in weekly payments until the maximum is paid out. Note that the right to receive Supplemental Income Benefits is waived if an injured worker elects to get your compensation in a lump sum.
Impairment Income Benefits are meant to make up for lost earning potential.
In short, the worker's compensation scheme recognizes the fact that a Texan with a long-term disability or impairment may not have the same amount of earning potential they did previously. This is why your compensation is tied to your Maximum Medical Improvement and Impairment Rating. However, the benefits scheme is very formulaic and may not come anywhere near your needs.
In other instances, a dispute arises over when an injured worker has reached Maximum Medical Improvement, or whether the Impairment Rating has been calculated properly. In either of these instances, the assistance of an experienced work accident attorney can be invaluable to ensuring that you get the maximum compensation within the workers' comp system.
If you feel that your Impairment Income Benefits are not being applied fairly, or if you have any questions about Texas Worker's Compensation, give us a call at anytime: (855) 326-0000.
For Further Reading about How Workers' Compensation Works in Texas: