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Changes in Permanent Disability - SB863


Both the minimum and maximum weekly benefit amounts have been increased, with the increases being phased in over a two year period. At the end of those two years, the maximum weekly permanent disability rate will rise to $290. How permanent disability ratings are calculated has also been changed. The current rating formula includes a modifier of between 1.1 and 1.4, depending on the body part that is injured. The modifier is intended to take into account the injured workers’ diminished future earning capacity, if any, as a result of his or her injury. For injuries that occur on or after Jan. 1, 2013, the rating formula will no longer include the “future earning capacity modifier.” Instead, all injuries will be adjusted by a factor of 1.4. Under the current rating system, there are also modifiers based on the injured worker’s age at the time of the injury, and his or her occupation. Those modifiers will continue to be used, and the Administrative Director of the Division of Workers’ Compensation has been authorized to develop a new schedule of occupational modifiers, to allow for more accurate consideration of today’s wide range of occupations. Currently, Labor Code Section 4662 describes circumstances in which injured workers may receive a permanent disability award of 100%. That section has not been changed by SB 863. Add-ons for permanent disability due to sleep disorders or sexual dysfunction resulting from physical injuries, which are now permitted, will no longer be available. Additionally, permanent disability add-ons for psychiatric injuries resulting from physical injuries are limited to “catastrophic” injuries and cases in which the injured worker was either the victim of a violent crime, or witnessed a violent crime. “Pure” psychiatric claims which do not arise as a result of physical injuries are not affected by this change. Injured workers can still receive treatment for sleep problems, sexual dysfunction and/or psych consequences of their injuries, even if permanent disability is no longer available for them.

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