Chapter 2 Unemployment & Disability Insurance Benefits
Section 5 - Temporary Disability Insurance
Average Weekly Wage
Weekly Benefit Amount
Total Benefits Payable
Limitation of Benefits
Nonduplication of benefits
Disability Fraud Hot Line
Delinquent Wage Requests
Disability Benefit Charges
Federal Tax Deductions
Right of Appeal
DABS - Disability Automated Benefits System
Disability During Unemployment: 4(f)
The Temporary Disability Benefits Law protects against wage loss suffered because of inability to perform regular job duties due to illness or injury. You are required to pay disability insurance taxes and to give the Division of Temporary Disability Insurance certain information about your employees when they file claims for disability benefits. Therefore, you should be familiar with sections of the Temporary Disability Benefits Law covering initial and continuing eligibility for benefits and the amount of benefits a claimant may receive. These provisions are essentially as listed following.
A subject employer is automatically covered under the State Plan unless workers are covered under an approved private plan for temporary disability insurance.
According to the Temporary Disability Benefits Law, an employer must issue to the worker and to the Division a “Claim For Disability Benefits,” Form DS-1, containing the worker’s name, address, Social Security number and wage information needed to determine the worker’s eligibility for temporary disability benefits.
If the average weekly wage used to calculate the weekly benefit amount is less than the average weekly wage that the individual earned during the 26 weeks immediately preceding the period of leave, the individual may request that the weekly benefit amount be recalculated using those 26 weeks. The request must be in writing to the Division of Temporary Disability Insurance.
• For the first seven consecutive days of each period of disability (the “waiting week”). The waiting week becomes compensable when disability benefits have been paid for all or some part of each of the three weeks immediately following the waiting week.
• For any period of disability that did not begin while the claimant was a covered individual. A covered individual means any person who is employed by a covered employer at the time the disability commences, or who has been out of such employment for 14 days or less.
• For any period during which the claimant is not under the care of a legally licensed physician, dentist, optometrist, podiatrist, chiropractor, psychologist, advanced practice nurse or certified nurse midwife.
• For any period of disability due to willfully and intentionally self-inflicted injury, or injury sustained in the perpetration by the claimant of an act punishable as a crime of the first, second, third or fourth degree under the New Jersey Criminal Code of Justice or for any period that the claimant would be disqualified for unemployment benefits due to gross misconduct.
• For any period during which the claimant performs any work for remuneration or profit.
• In a weekly amount which, together with any remuneration the claimant continues to receive from his/her employer, would exceed his/her regular wages immediately prior to disability.
• For any period during which the claimant would be disqualified under the Unemployment Compensation Law for participation in a labor dispute, unless the disability commenced prior to such period.
• For government workers: for any period during which a covered government worker has not exhausted all accumulated sick leave.
• For any period for which benefits are paid or payable under any unemployment compensation or similar law, or under any disability or cash sickness benefit or similar law, of the State of New Jersey, or of any other state or the federal government (including permanent Social Security disability benefits).
However, if disability benefits are paid or payable under the disability benefits law of another state, or under the federal maritime law, a claimant may still be eligible for New Jersey benefits. In this circumstance, the weekly benefit rate would be reduced by the amount paid concurrently under the other state or maritime law.
• For any period during which workers’ compensation benefits are paid or payable, other than for permanent partial or permanent total disability previously incurred.
Also, temporary disability benefits shall be reduced by the amount paid concurrently under any governmental or private retirement or pension program to which a worker’s most recent employer contributed on his/her behalf. However, Social Security retirement benefits do not reduce State Plan disability benefits.
Based on the chargeable employer’s average experience rate for State Plan temporary disability insurance during the most recent three years, the Division calculates the worker’s portion of Social Security (FICA) contributions and Medicare contributions of each benefit authorization. That amount is deducted from the benefits to be paid to the claimant and is forwarded to a federal depository. To calculate the FICA and Medicare contribution that you, the employer, must remit to the federal government, refer to the “Taxable Amount” column on the Division’s Form DS-7C, “Notice of Disability Benefits Charged or Credited.” The figure in this column specifies the portion of benefits to use in calculating the employer’s contribution at the applicable employer rate.
Upon the claimant’s completion of Form W4S, “Request for Federal Income Tax Withholding from Sick Pay,” a federal income tax deduction may also be made from the payable disability benefit gross amount. This deduction is indicated on Form DS-7C in the “Federal Tax Withheld” column. The employer is not required to match this withholding amount.
If you have questions about payment of FUTA taxes on the portion of paid benefits that is attributable to your disability insurance contributions as an employer, direct them to the Internal Revenue Service. The Division makes no deduction from paid benefits to meet employer FUTA liability.
There are samples of DABS-generated forms in the Forms Section of this handbook.
A brief synopsis of the automated functions of DABS includes:
1. Daily mailing of benefit checks to claimants in conjunction with daily mailing of notices for these payments to the chargeable employer.
2. Daily mailing of requests for information not received on the claimant’s original disability claim form (DS-1). When the forms are returned, the system automatically directs the form to the examiner assigned to the case.
3. System-generated determinations calculated from the information received by State Plan Disability. The chargeable employer is mailed a copy of all determinations rendered by the system.
4. Various internal controls built into the system to protect the chargeable employer from fraudulent claims.
These automated functions have improved the overall accuracy and consistency of determinations issued by the State Plan Bureau. In addition, automation has increased capacity and efficiency in handling and responding to telephone and written inquiries from claimants, employers, and all other interested parties.
The Division of Temporary Disability Insurance conducts informational seminars. Interested employers or their representatives have the opportunity to learn more about the New Jersey Division of Temporary Disability Insurance Program and the DABS claims-processing system by contacting:
New Jersey Department of Labor and Workforce Development
Division of Temporary Disability Insurance
PO Box 387
Trenton, New Jersey 08625-0387
Claims filed under this program are governed by both the Unemployment Compensation and Disability Benefits laws. However, these claims are primarily unemployment insurance claims, established under Section 4(f) of the Unemployment Compensation law. Therefore, to be eligible for benefits, the claimant must meet all the requirements of this law, and be totally unable to work. The claimant must also be under the care of a legally licensed physician, dentist, podiatrist, optometrist, chiropractor, psychologist, or advanced practice nurse.
To have a valid 4(f) claim, the claimant must have been paid a minimum amount of wages while in a job covered by New Jersey’s disability insurance program during the base period of the claim. Employment with local governments that have not elected disability coverage for their workers is not covered for disability benefits; nor is out-of-state employment, even though it is covered for unemployment insurance.
To file for benefits, the claimant must complete Form DS-1, “Claim for Disability Benefits,” and mail it to the Division of Temporary Disability Insurance, PO Box 387, Trenton, New Jersey 08625, where the claim will be processed.
If the claimant has an unemployment insurance claim and becomes disabled while unemployed during the benefit year, he/she may be paid 4(f) benefits against the claim. In most cases the claimant will receive the same weekly rate as was received on the unemployment insurance claim. The maximum that one can collect on unemployment insurance and 4(f) benefits combined is one and one-half times the maximum benefit amount of the claim.
If the 4(f) claim is the initial claim, it will be processed under the wage record system. This system generates a monetary determination listing all New Jersey subject employers for which the claimant worked during the base period. The determinations also include all wages reported by each of those employers.
A claim filed for disability will be valid if the claimant earned at least $145 in covered employment in each of 20 calendar weeks, or earned at least $7,300 during the base period. The regular base period is the first four calendar quarters of the last five completed calendar quarters before the date of the claim.
If a claim was originally determined invalid under the regular base period, there are two alternative base periods that can be used to establish monetary eligibility. Alternative Base Year #1 consists of the four most recently completed calendar quarters preceding the date of claim, and Alternative Base Year #2 consists of the three most recently completed calendar quarters preceding the date of the claim plus weeks in the filing quarter up to the date of claim.
The maximum benefit for 2013 is a weekly rate of $624, and a maximum amount of $16,224. The claimant is entitled to one week of potential benefits for each week worked in covered employment, subject to a maximum of 26 weeks.
Once the claimant completes Form W4S, “Request for Federal Income Tax Withholding from Sick Pay,” a federal income tax deduction at the rate of 10% will be made.
Information necessary to determine eligibility is obtained from the claimant, to whom we mail a packet of forms the claimant must complete and return. This includes dependency information, as well as student, corporate officer or pension status. Separation information is also obtained from the employer. Both the claimant and the employer have opportunities for rebuttal through telephone calls, which are documented by memoranda.
Upon receipt of all information, a determination will be made. It remains in effect and is applicable to any claim that the claimant might make during the same benefit year for unemployment insurance benefits.
Benefits payments made under the Disability During Unemployment program are not charged to the claimant’s base-year covered employer(s); such payments are charged to the unemployment disability account within the State Disability Benefits Fund. However, because claimants may use 4(f) claims to claim unemployment benefits after recovery from the disabling condition, it is important that employers respond timely to any Form BC-28, “Request for Separation Information,” issued in connection with a 4(f) claim. Charges for unemployment benefits potentially payable during the benefit year of a 4(f) claim may be affected by the information provided by employers on Form BC-28.
A claimant who disagrees with a determination of 4(f) benefits and wishes to appeal may do so in writing within 10 days from the date the decision was mailed or within seven days of receipt of the determination. However, if a claimant disagrees with a demand for refund of 4(f) benefits, he/she may do so in writing within 24 days of the date of mailing or within 20 days of receipt of such demand for refund. If the appeal is not filed within the required time limits, an explanation for the delay must be provided. The appeal period will be extended only if good cause for filing late is shown. Good cause exists when it can be shown that the delay was due to circumstances beyond the appellant’s control, which could not have been reasonably foreseen or prevented. An appeal that is filed late without good cause will be dismissed.