Indemnity benefits are payments to the injured worker or dependents that compensate for wage loss, functional impairment, or death. They are also called disability or lost-wage benefits, and can be classified as either temporary or permanent.
Indemnity benefits include:
Temporary Total Disability (TTD) benefits go to workers who are temporarily unable to work because of an injury. The TTD amount is paid at the full compensation rate, which is two-thirds the worker's average weekly wage, based on wages for the 26 weeks prior to the accident.
Temporary Partial Disability (TPD) benefits are available when the employer keeps the worker employed during the temporary disability period, but at a reduced wage or reduced hours. TPD benefits are two-thirds the difference between the regular and reduced wage, up to the maximum compensation rate.
Permanent Partial Disability (PPD) benefits are paid to workers once they have reached Maximum Medical Improvement (MMI). Benefits are based on the worker's impairment rate and other factors, and compensation depends on the nature of the injury and the body part(s) affected.
If the total PPD rating is less than 80 percent, the maximum duration of indemnity payments for any whole body injury is 500 weeks, including TTD and PPD. If the PPD rating is 80 percent or more, benefits are paid for a maximum of 700 weeks.
- Whole Body - Impairment Only: Injuries to the body as a whole. Physicians assign a percentage impairment rating to the worker, based on an American Medical Association standard. If a worker is back at work and earning at least the pre-injury wage, the worker receives PPD benefits at the compensation rate multiplied by the impairment rating percentage. (12% x 333.32)
- Example: A worker is at MMI and has returned to work making the pre-injury wage. The pre-injury average weekly wage (AWW) was $500, so the compensation rate would be $333.32, two-thirds of the AWW. If the HCP assigns an impairment rating of 12 percent, the worker would quailify for a weekly payment of $39.99 for the injury. (See minimum/maximum AWW tables).
- Whole Body - Impairment with Modifiers: If the worker reaches MMI and has not returned to employment at the pre-injury wage, the worker's benefits are based on a formula that is calculated using New Mexico statutes and the Dictionary of Occupational Titles. The worker's age, education, skill level, training and reduction in physical capacity are "modifiers" used to calculate benefits.
- Example: A 42-year old worker with an injury to the right hip is given an impairment rating of 12 percent. The worker receives one modifier point for his age. Since he never completed high school, he receives two points. The worker's specific vocational preparation (SVP) assigned by the Dictionary of Occupational Titles is six because he is a gas welder. Workers with an SVP of six receive two modifier points. He needs training for another vocation, so is awarded one point. The worker's modifiers total six points. The six modifier points are multiplied by the points the worker receives for his residual physical capacity (RPC), which is based on a chart set by statute. The number is based on a worker's capacity to perform physical work before and after an injury. Consulting the RPC chart, the HCP assigned an RPC rating of three. Multiplying the modifiers of six with the RPC rating of three provides a total of 18. Adding 18 to the impairment rating of 12 gives a total of 30, which results in a PPD rating of 30 percent.The worker's pre-injury wage was $500 per week, so the compensation rate would be two thirds that amount, or $333.32. Multiplying the compensation rate by 30 percent results in a weekly PPD payment of $100.
- Scheduled Injury - These benefits are paid for the loss of use of a specific body part, and are paid at a percentage of the compensation rate. The number of weeks benefits are due depends on the body part lost (i.e., arm, foot), which is determined by statute.
- Permanent Total Disability (PTD): PTD provides lifetime benefits at the weekly compensation rate. To be eligible, the worker must have suffered a severe brain injury or the permanent or total loss of use of both hands or both arms or both feet or both legs or both eyes, or any two of the body parts listed.
Death or Survivor Benefits
Death or survivor benefits are paid to the worker's dependents, up to the full compensation rate, for the maximum period of benefits. The maximum amount due is how much the worker would have received in temporary total disability benefits, up to 700 weeks. The amount is exclusive of funeral benefits, which is currently set at $7,500.
With the approval of a workers’ compensation judge, a worker may elect to receive compensation benefits in a lump-sum payment. There are several categories of lump-sum payments:
Return to work lump-sum payment
Partial lump-sum payment for debt
Find out more about the lump-sum payment process.