NY & NJ State Mandatory Disability

State Mandated Disability Insurance

Statutory state disability insurance is a temporary, short-term disability benefit that is mandatory
in both New York and New Jersey. 


New York

Disability Benefits Law Employers must provide disability benefits coverage to employees for an off-the-job injury or illness. Coverage for disability benefits can be obtained through a disability benefits insurance carrier who is authorized by the New York State Workers’ Compensation Board to write such policies. Another option is for large employers to become authorized by the Board to self-insure.An employer is allowed, but not required, to collect contributions from its employees to offset the cost of providing benefits. An employee’s contribution is computed at the rate of one-half of one percent of his/her wages, but no more than sixty cents a week. Disability benefits = temporary cash benefits paid to an eligible wage earner, when s/he is disabled by an off the job injury or illness. The Disability Benefits Law provides weekly cash benefits to replace, in part, wages lost due to injuries or illnesses that do not arise out of or in the course of employment. Disability benefits are also paid to an unemployed worker to replace unemployment insurance benefits lost because of illness or injury.Disability benefits include cash payments only.Medical care is the responsibility of the claimant. It is not paid for by the employer or insurance carrier. Cash benefits are 50 percent of a claimant’s average weekly wage, but no more than the maximum benefit allowed, currently $170 per week.Benefits are paid for a maximum of 26 weeks of disability during 52 consecutive weeks. For employed workers, there is a 7-day waiting period for which no benefits are paid. Benefit rights begin on the eighth consecutive day of disability. An employer must supply a worker who has been disabled more than seven days with a Statement of Rights (Form DB-2715), within five days of learning that the worker is disabled.



New Jersey

State Temporary Disability Insurance (TDI) All New Jersey employers covered by the Unemployment Compensation Law are also subject to the Temporary Disability Benefits Law with the exception of certain government entities.A subject employer is automatically covered under the State Plan unless workers are covered under an approved private plan for temporary disability benefits.A claimant must have had at least 20 calendar weeks in covered New Jersey employment in which he/she earned $145 or more (called “base weeks”), or have earned $7,300 or more in such employment during the “Base Year” period (the 52 weeks immediately before the week in which the disability began). Only covered wages earned during the base year period can be used in determining a claim.Benefits may be limited if the employee does not meet certain eligibility requirements, has benefits from another source, or continues to be paid by the employer while disabled.http://lwd.dol.state.nj.us/labor/tdi/tdiindex.html Both New Jersey workers and employers contribute to the cost of temporary disability coverage.Cost to Workers For 2011, workers contribute at the rate of one-half of one percent (0.5%) on the first $29,600 (taxable wage base) in covered wages earned during this calendar year. The maximum worker contribution for 2011 is $148.00. This contribution is in the form of a salary deduction that your employer takes from your weekly wages.Cost to Employers Although the taxable wage base is the same as for workers, the contribution rate for employers varies from 0.10% to 0.75%. For 2011, employers contribute between $29.60 and $222.00 on the first $29,600 earned by each employee during this calendar year.On January 1 of each year, the taxable wage base changes. Weekly Benefit Rate (WBR) Your weekly benefit rate is calculated using your average weekly wage. The average weekly wage is generallybased on the earnings in the eight calendar weeks immediately beforethe week in which the disability begins. The total wages earned during all base weeks worked in the eight week period are divided by the number of such base weeks to obtain the average weekly wage. Each claimant is paid two-thirds (2/3) of his/her average weekly wageup to the maximum amount payable set for that calendar year. The maximum weekly benefit rate is $559 for disabilities beginning on or afterJanuary 1, 2011.Maximum Benefit Amount (MBA) The maximum benefit amount which may be paid for each period ofdisability is one-third (1/3) of the total wages you earned in New Jersey

covered employment during the base year, or 26 times the weekly benefit amount, whichever is less.

Private Plan Coverage The Temporary Disability Benefits Law allows employers the option of choosing to establish a private plan for the payment of temporary disability benefits in place of paying benefits under the State Plan. All private plans must be approved by the Division of Temporary Disability Insurance.http://lwd.dol.state.nj.us/labor/tdi/employer/private/pp_emp_menu.htmlDisability During Unemployment Program If a worker becomes totally disabled and has been out of New Jersey covered employment for more than 14 days, he or she may be eligible for benefits under the Disability During Unemployment program.Claims filed under this program are governed by both the Unemployment Compensation and Disability Benefits Laws.  However, it is essential to remember that they are primarily unemployment insurance claims, established under Section 4(f) of the Unemployment Compensation Law.  To be eligible for benefits, the claimant must meet all the requirements of this Law, and become totally unable to work.  The claimant must also be under the care of a legally licensed physician, dentist, podiatrist, optometrist, chiropractor, psychologist, certified nurse midwife, or advanced practice nurse.In order to have a valid Disability During Unemployment 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.http://lwd.dol.state.nj.us/labor/tdi/employer/ddu/ddu_emp_menu.html Neither the employer, nor their workers are required to contribute to the State’s Temporary Disability Insurance Trust Fund while the private plan remains in existence. The cost to the worker for the private plan cannot be more than it would be under State Plan.If employees are to be required to contribute toward the cost of the plan, a written election must be held and a majority of employees must agree to the plan prior to the effective date of the plan.Disability During Unemployment benefits are subject to federal income tax. Upon the claimant’s written request, a federal income tax deduction at the rate of 10% will be made.All benefits received under the Disability During Unemployment program are considered taxable for federal income tax purposes.  At the beginning of the year the claimant will be sent a Form 1099-G which will include the disability benefits as well as any unemployment benefits they received during the previous calendar year.Benefits under the New Jersey Temporary Disability Insurance Program are not taxable for New Jersey State Income Tax purposes. At a minimum, approved private plans must meet the basicprovisions required of State Plan. Under a private plan:o    Benefits paid must be at leasto    equal to the amount that would be paid on a State Plan claim.o    Eligibility requirements cannot be more restrictive than they wouldo    be for a State Plan claim.o    Coverage must be at least equal to the coverage offered by the State Plan.

o    Your claim will be processed

o    using wages which your New

o    Jersey employers have submitted

o    to a centralized databank.

Weekly Benefit Rate Your weekly benefit amount is

60% of your average weekly

wage earned during your base period. For a disability that begins in 2011, the maximum weekly benefit rate is $598. Not everyone receives the maximum weekly benefit amount. If your weekly benefit rate is less than $598, your benefits might be increased if you have unemployed dependents.

Maximum Benefit Amount You are entitled to one (1) week

of potential benefits for each base week in your base year period during which you worked

in covered employment, subject to

a maximum of 26 weeks. As of

July 24, 2009, a base week is a week with earnings of at least


If you have an unemployment insurance claim and become disabled while unemployed during the benefit year (a benefit year is one year minus two days period beginning from the date of the claim.), you may be paid

Disability During Unemployment benefits against that claim. In general, you will receive the same weekly benefit rate as you were receiving on your unemployment insurance claim. The maximum

that you can collect in unemployment insurance and Disability During Unemployment combined is one and one-half

times the maximum benefit

amount on your claim. If you do

not have a current unemployment insurance claim, the filing of a

valid Disability During Unemployment claim will start a benefit year for you.