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How are my disability benefits calculated under the Defense Base Act?

 

Calculating disability benefits under the Defense Base Act

I give you an insider’s view of Defense Base Act Law, with no sugar coating. No lawyer talk, no double talk. Ever." 

Defense Base Act Lawyer - Bill Turley and author of the 5 Star book - Win Your Defense Base Act Case

Do I have a disability under the Defense Base Act?

There are basically two benefits under the Defense Base Act (DBA): medical benefits and weekly disability benefits.  The weekly disability benefits are the money that the DBA insurance company is obligated to pay you if you are disabled. That is, if you have a disability. 

Under the DBA you don't get money unless you can show that you have a disability.  If you're like most of our clients, you want to get to the bottom line as quickly as possible. I explain this in a lot more detail in this article. But here goes:

For temporary total disability - you will need to show that you are unable to perform your usual and customary employment as an overseas civilian contractor due to the injuries you sustained overseas. While this sounds simple enough, there is more than meets the eye here oftentimes. 

For permanent disability benefits under the DBA, it depends on whether you have what the law calls a "scheduled disability" or an "unscheduled disability."  

For a scheduled disability your "disability" must be an impairment under the American Medical Associations Guide to Evaluation of Permanent Impairment. Unless you are so disabled that you can't work at all - then what matters is your "AMA Impairment Rating".  Whether you can work back at your overseas job is not an issue. All that matters is your AMA Impairment Rating. I go into this more in depth in this article. 

For a non-scheduled injury,  if you are able to return to your usual and customary overseas employment, then you get no money for your permanent disability under the DBA.  Thus, you will have to show that your injuries prevent you from performing your usual and customary employment overseas.  Disability under the DBA is an economic concept based on a medical foundation. That is, your disability under the DBA for a non-scheduled injury is based upon a wage loss concept. 

There is a whole lot more wrapped into this. 

Having your doctor understand what your overseas job is all about is sometimes crucial 

Remember, in order to get weekly temporary total disability compensation benefits (read: money) under the DBA and permanent disability benefits if you have an unscheduled injury - then you are going to need a medical opinion that states that due to the injuries that you sustained while overseas that you are medically unable to perform you're usual and customary employment overseas. 

Suppose you're a security consultant that works in a war zone, such as Afghanistan. I have talked to many doctors that seem to think that a "security consultant" is either a person in a suit talking about security or, at best, a mall cop that rides around on a segway going between watching teenagers in the food court and bussing around the parking lot. Seriously. 

You need to make sure that your doctor understands that you have to wear full kit, back pack, guns and ammunition - and the weight of all of this and that you have to be able to carry your buddy out if that is needed. In other words, your doctor has to understand what it is that you do overseas. Or else, how can the good doctor give an opinion about whether your injuries prevent you from performing your overseas job? 

Compensation is Based on Average Weekly Wage

If you are injured while working as an overseas civilian contractor and you're unable to do your job for three days or longer, you are eligible for disability benefits under the Defense Base Act (DBA). These benefits are paid to you 14 days after your employer is notified of your injury. So, make sure you let your employer know that you were hurt and are unable to work. You will need to do this in writing using form LS 201.

There are four types of disability compensation benefits under the DBA:

  1. Temporary Total
  2. Temporary Partial
  3. Permanent Total with annual increases
  4. Permanent Partial

Regardless of whether your disability is partial or full, temporary or permanent, your compensation is based on your average weekly wage or AWW. All compensation is subject to a Maximum Compensation Rate, which is adjusted each year on October 1. The current rate is $1,436.48 per week.

Temporary Total Disability (TTD): Temporary total disability is granted if your injury leaves you completely unable to work for a short period of time. TDD benefits equal two-thirds of your AWW for the period that you are unable to work.

Temporary Partial Disability (TPD): A person is considered to have a temporary partial disability if he is able to work, but cannot work as many hours as usual or must do a lower-paying job.  TPD benefits are calculated as two-thirds of the difference between the employee’s AWW and his earnings while partially disabled.

Permanent Total Disability (PTD): Permanent total disability benefits are awarded when an injury leaves you unable to work for an indefinite period of time. PTD calculated as two-thirds of your AWW. Permanent disability benefits are subject to an annual increase based on the U.S. national average weekly earnings. The adjustment is applied on October 1 of each year. Permanent disability benefits are payable as long as the disability continues.

Permanent Partial Disability (PPD): If you have a permanent partial disability, you are able to work, but you may be unable to do your former job.  There are two ways PPD is calculated. If you have a scheduled disability, you will receive a percentage of your AWW for a predetermined period of time. The percentage is based on your disability rating. If you have an unscheduled disability, you will receive two-thirds of the difference between your AWW and your current earnings.

 

There is a whole lot to chew on here

I am giving you an overview here. I suggest you claim your free copy of my book Win Your Defense Base Act Case for more detail on all of this. 

Win Your Defense Base Act Case - Bill Turley

5 Stars on Amazon.com

First of all, calculating your disability under the Defense Base Act is not as straightforward as it may first appear. 

You are going to need to calculate your average weekly wage. Or AWW.  AWW is probably the most heavily litigated part of the law in this area. Maximizing your average weekly wage (you can read more about it here) is critical for you to get the most benefits as possible under the DBA.

You are going to need to use the correct compensation rate (you can read more about it here). 

The DBA is wages driven. Meaning, the higher your wages the more money compensation you are entitled to under the law. Because of this, the DBA insurance company is going to try and calculate your AWW as low as possible.

Generally, your AWW is going to be 2/3's of your earnings (your wages).


Scheduled vs. Non-Scheduled

You have to determine whether you have a scheduled or a non-scheduled injury.

If you have a scheduled injury, then you multiply your compensation rate times the number of weeks under the AMA Guide to the Evaluation of Permanent Impairment.  A case study is provided below. 

I suggest that you visit the articles that I have provided links to in order to put all of this together.

Non-scheduled injuries are based upon a wage loss concept.

 

Calculating your disability for a scheduled injury - a case study - Steve with a leg injury that occurred in Afghanistan 

I will provide a case study for Steve, who worked in Afghanistan as a security expert. Steve has a leg injury.  Steve has an AMA Impairment for the lower extremity (read: leg) of 38%. 

Under the Longshore Act a leg injury is 288 weeks. 

288 weeks times 38% =  109.44

You always need to calculate Average Weekly Wage.  Steve has an AWW of  $3,219.45 a week.  Steve has a maximum compensation rate of $1510.76.

109.44 weeks times $1,510.76 =  $165,337

Calculating your disability for a scheduled injury - a case study - Tim with a back injury that occurred in Afghanistan

I will provide a case study for Tim, who worked in Afghanistan as a security consultant. Tim has a back injury, that prevents him from returning back to work overseas. 

DBA Insurance company's AWW contention

There is a major dispute over Tim's AWW because he worked overseas for only 23 weeks before he was injured. The DBA insurance company contends that using the 52 weeks before his injury, that Tim has a AWW of  $1,284.25.  

DBA insurance company's position on extent of disability/ loss of wage earning capacity

The DBA insurance company gets a Labor Market Survey that indicates that there is suitable alternate employment for Tim in the area where he lives, where Tim can earn $1,034 a week. 

Thus, using the DBA insurance company's AWW and Labor Market Survey the calculation is as follows: 


 $1,284.25
-$1,034.00
 $   250.25 

$ 250.25 times 2/3 =  $166.83 

Admission of injury 

The DBA insurance company  "admits" that had a back injury. Meaning that the insurance company takes the position that Tim really was injured. Which is difficult to contend otherwise considering the incident report and all the witnesses that say that they saw Tim get injured when he was diving for cover during a rocket attack and Tim was grimacing in pain dn holding his back immediately afterwards)

Malingering

In addition, as usual the DBA insurance company is taking the position that Tim is "malingering."  Which is a fancy term to say that Tim is faking his injuries. The insurance company doctor is suggesting that Tim is not really as injured as Tim's doctor concludes and that Tim is really able, medically, to return to work as a security consultant. Thus, the DBA insurance company's position is that Tim is able to return to his usual and customary employment with no wage loss.

Unfortunately, as is sometimes the case, there is evidence that supports this malingering contention. Medically, the insurance company reads the back MRI as not "conclusive" that Tim's back is, in fact, painful.  That is the problem with pain. It is difficult to prove pain. The insurance company conducted some sub-rosa videos, which show Tim taking out the trash, doing lifting while working on cars, and working out at the gym. 

If the Judge credits the insurance company's contention in this regard, Tim will be awarded no permanent disability benefits. 

Alternate position 

But if the Judge believes that Tim can't return to work, then it is the DBA insurance company's position that Tim has a loss of wage earning capacity of $166.83 a week. 

Tim's AWW contention

Tim contends that only his overseas earnings should be used in calculating his AWW, and thus he has an AWW of $2,854.56. 

Tim's position on extent of disability/ loss of wage earning capacity

Tim, of course, strongly disagrees with the insurance company's contentions, on just about every level.  Tim's treating physician has opined that Tim is unable to return to his usual and customary work.  Tim's doctor also agrees that Tim can do limited activities such as taking out the trash and doing limited lifting.  In fact, he suggested to Tim that Tim get back into the gym and try and strengthen himself.  However, all of this is a far cry from working in a war theater, in full kit, and having the ability to carry out your co-workers if someone gets injured.  

In fact, all of these activities are in the contract for security consultant. 

It is Tim's contention that the best evidence of his wage earning capacity is the job he is actually doing as a real estate appraiser earning  $725 a week. Tim can demonstrate that he was relentless in looking for work in the area where he lives and $725 a week is good money, considering his education, training, skills and his injuries. 

Thus, Tim's loss of wage earning capacity is as follows: 


  $ 2,854.56
 -$    725.00
  $ 2,129.56

 $ 2,129.56 x 2/3 =  $1,419.69 

Thus, Tim's contention is that he is owed $1,419.69 in permanent partial disability benefits 

Bottom line

This gives you a good idea of how this all plays out in a DBA case. I have been simplistic in order to achieve clarity. But, I think you get the idea. 

Need help right now?

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This article isn't legal advice

These discussions and/or examples are not legal advice. All legal situations are different. These testimonials, endorsements, photos and/or discussions do not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter, or your particular case/ situation. Every case is different. There are any number of reasons why DBA cases are not won and/or are not as successful folks might have hoped for.

Just because we have gotten great results in so many other Defense Base Act cases, doesn't guarantee in particular result in other cases. Including, your DBA case. Every case is different.

William Turley
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“When I seek out professional advice, I don’t want B.S., I want it straight up. I figure you do also.”