Permanent Total Disability

Permanent total disability in Illinois worker’s compensation claims mean that a person is entitled to total disability for life.  If someone is a permanent total they are entitled to two-thirds of their average weekly wage for life.  This is much like temporary total disability, but it is permanent.  Many people confuse total permanent disability with the designation of the “Person as A Whole”, which is five-hundred weeks of disability.  Five-hundred weeks of disability is 9.6 years; whereas, permanent total disability lasts for an injured worker’s life.

There are three ways to get a permanent total disability.  First there is what they call a statutory permanent total disability, which is found at Section E 18 of the Act. The statutory permanent total applies when a victim loses two limbs or both eyes.  If a person loses these body parts, they’re entitled to permanent total disability whether they can work or not.

The other types of permanent total disability require that the injury victim prove that they cannot work.  The victim can present medical evidence supporting a claim of total disability that a person is unable to work.

There is also something called an “Odd Lot.” Under an odd lot permanent total disability, a person must prove that due of their injury they unable to find work.  Usually this requires testimony from a vocational expert that there is no reasonably stable job market for the injured worker.  The injured worker should normally have a decent job search to prove that they tried to find work.  This sometimes involves the assistance of a vocation assistant that is hired by the employer. Sometimes these vocational experts are really witness against the worker. They give the worker a lot of things to do, in order to get a job, which are really just hoops to jump through.  The employer hopes the employee fails to comply with the vocational expert’s requests so that they can argue that the job search was not in good faith.  If the job search is not in good faith the arbitrator is permitted to deny the permanent total claim. Often this means that the person gets a wage loss differential, or a partial permanent disability.

The injured victim is entitled to two-thirds the average weekly wage, just like they are when they are on temporary total disability.  However, this extends through the person’s entire life.  This is different from a wage loss differential claim because the wage loss differential claim is intended to end at the injury victim’s work life.

Injury victims and employers, frequently, settle permanent total disability claims based on lump sum. This is normally based on the present cash value of the award. In other words, you view the settlement as the fair market value of the income stream the permanent total disability would generate. In other words, if someone were to make $500.00 a week for life, and they had a 30 year like expectancy, this equates to $500.00 multiplied by 52, which is $26,000 dollars. If you multiply that by 30, it comes out to $780,000.00.  The present cash value is the amount of money it would take invested given rate of interest that would generate $780,000 over the course of a person’s life and at the end of their life be exhausted. In other words, the calculation takes into account the invasion of principle by the person who gets the income stream.

This is known as a present cash analysis. Typically, in order to settle for a large lump sum, insurance companies require the injury victim to discount the award somewhat to get them to pay out that much money. Otherwise, the insurance company may elect to invest the money and pay it out over time.