Inflation Adjustment

Depending on the date of injury, the weekly benefit amount may be subject to adjustment for inflation each year:

(39 M.R.S.A. §§54, 55, 58 as amended).

Apply the inflation adjustment by multiplying the old benefit amount by the "multiplier". Use the multiplier corresponding to the most recent July 1 preceding the date the adjustment is being made.

In cases where you are adjusting the maximum compensation rate, you must do so on July 1 of each year unless the date of injury is between June 30, 1985 and November 20, 1987. For those dates of injury the adjustment is on August 1 of each year (39 M.R.S.A. '53-A and '53-B).

In cases where you are adjusting the maximum compensation rate, you must do so on July 1 of each year unless the date of injury is between June 30, 1985 and November 20, 1987. For those dates of injury the adjustment is on August 1 of each year (39 M.R.S.A. §53-A and §53-B).

A. Injuries Between 11/20/87 and 12/31/92:

Difference Between 100 % Total and 100 % Partial Benefits

As noted above, employees injured between 11/20/87 and 12/31/92 are entitled to inflation adjustments for total incapacity (39 M.R.S.A. §54-B), but not for partial (39 M.R.S.A. §55-B). Sometimes, because of an adequate work search (see PARTIAL COMPENSATION), a partially disabled worker is entitled to a weekly benefit which is equivalent to total benefits. This is often called 100 % partial benefits. In such cases, however, the payment of benefits is made pursuant to section 55-B, not section 54-B, and the employee is not entitled to an inflation adjustment. Moreover, such benefits are subject to the 400-week cap (see PARTIAL COMPENSATION).

If an employee establishes a capacity to perform only part-time work, and he can demonstrate that there is no part-time work available to him in his community because of the effects of the injury, he remains eligible for benefits on account of total incapacity under section 54-B, rather than 100% partial benefits under section 55-B. The Law Court has held that this principle applies to injuries between November 20, 1987 and October 16, 1991.

If it is applicable (see MAXIMUM WEEKLY BENEFIT), claimants are entitled to receive the maximum benefit as it is adjusted each July 1 or August 1 regardless of whether they are entitled to inflation adjustments, and the three-year waiting period does not apply.

Do not retroactively calculate inflation adjustments to the third anniversary of the injury if a partially incapacitated employee becomes totally incapacitated. Inflation adjustments are awarded only if the employee is totally incapacitated on the anniversary date of his injury. If the employee then regains partial work capacity, go back to the original uninflated average weekly wage to calculate partial benefits.

B. Varying Rates

Injuries before 11/20/87: When an employee is entitled to inflation adjustment of partial benefits (i.e., injuries before 11/20/87) and is working and receiving varying rates partial compensation, the benefit is calculated as follows: (1) Apply the appropriate inflation adjustments to the AWW, (2) Subtract actual earnings, and (3) Multiply by two-thirds.

Injuries on or after 11/20/87: Not subject to inflation for partial compensation, so varying rates partial is calculated without the inflation adjustment in step one above.

C. Successive Injuries Covered by Different Carriers

Calculating benefits in successive injuries cases falling under differing provisions of the Act has been the subject of several recent Court cases. The rules are not always clear.

1. Later Injury on or After 11/20/87 Through 12/31/92

We advise that if the later injury falls during the above time period and the employee is receiving partial benefits, no inflation benefits apply to any portion of his benefits, even if some percentage of the employee's benefits might be attributable to an earlier injury that occurred at a time when the law permitted inflation adjustments in cases of partial incapacity.

2. Later Injury Occurs on 01/01/93 or Afterward

The rule for more recent injuries is now the opposite: If the injuries fall on both sides of 01/01/93, when the 1992 Act became effective, "the employee's rights and benefits for the portion of the resulting disability that is attributable to the prior injury must be determined by the law in effect at the time of the prior injury" (39-A M.R.S.A. §201(6). Section 201(6) became effective June 30, 1998 and therefore applies to all cases except those where the petitions were filed before its effective date. Under section 201(6), an employee entitled to inflation adjustments under pre-1993 law will likely receive inflation adjustments for the percentage of his incapacity attributable to that earlier injury and will receive no inflation adjustments on the percentage of incapacity attributable to the post-1992 injury. This issue is decided on a case by case basis. There is a line of cases suggesting that the employee is generally paid based on the average weekly wage for the last date of injury, unless that wage is lower because of the effects of an earlier injury. In cases in which the Employee is entitled to inflation adjustments on an earlier date but receives benefits on the post 1992 injury date, case law implies that the Employee may be entitled to the inflation adjustments directly over and above the compensation received for the 1992 date of injury.