Understanding How Disability Percentage is Calculated under Workers Compensation Benefits

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Injury during work resulting in permanent disability can create havoc in anyone’s life. Your company is entitled to compensate for the injury based on the disability percentage. Now, many people wonder how the percentage is calculated and how it varies from person to person.

Meaning of Permanent Disability under Workers Compensation

Permanent disability refers to any injury wherein the employee has not completely recovered. This needs to be backed by a doctor’s report after which a disability rating will be allocated for the employee.  Depending on the disability percentage, the compensation will be given to the disabled employee. This is applicable for mental health disabilities also.

The compensation laws might differ slightly from one state to another.  Compensation for permanent disabilities can help employees be independent and help cope up with their disabilities. The company will also pay for the caretaker services and medical expenses and treatment.

If you live and work in California, you need to be aware of what the workers compensation benefits are.  The CA disability percentage will be calculated only after the situation has been assessed for Whole Person Impairment (WPI). Here experts are appointed by the Workers Compensation Judges and the case is discussed with them. These experts will analyze, evaluate and share their opinions, based on which the percentage will be calculated.

Calculation of Permanent and Psychiatric Disability Percentage

The WPI for permanent disability is determined based on the extent of the injury, how it is affecting their Activities of Daily Living (ADL’s).  The assessment by the medical experts needs to be in line with the American Medical Association (AMA) guidelines.

Impairments caused due to work related injuries are handled in a different manner. There is a thin line of difference between permanent disability and impairment. Impairment can cause disability. Any permanent or temporary loss of functioning of any body part can be termed as impairment.

In the case of psychiatric injuries, the medical experts will be psychiatrists who will look into the WPI and assign a Global Assessment of Function (GAF) score.  The opinions of medical experts might vary, so it is possible that two people with the same disability might get different disability percentage.

The percentage is determined based on the below:

  • Each impairment or disability is awarded a percentage out of 100
  • The percentage rating depends on the fixed number of weeks of compensation
  • The compensation will be based depending on the workers fixed average weekly wage

The permanent disability percentage ranges from 0 to 100, wherein 0 represents no reducing in the earning capacity and 100 represents permanent disability.

Permanent and Stationary Reports

Another important criterion to determine the permanent disability percentage is the permanent and stationary reports.  When a worker’s condition after an injury is not improving, this is termed as a permanent and stationary.  This happens when the patient has reached Maximal Medical Improvement (MMI)

The permanent and stationary report should describe specific medical issues, work restrictions, medical assistance, if required and whether the worker will be able to return to their previous job.


Ensure that you ask for a copy of all your medical bills. Go through the reports as these can come in handy while claiming for compensation.