One of the most frequent questions regarding Michigan No Fault auto insurance is whether a person injured in a car accident can collect wage loss benefits and unemployment benefits at the same time.
Most auto insurance attorneys will say no. And in most situations, that is the correct answer. After all, No- Fault wage loss means that you are unable to work because of your injuries, hence the name – wages you have lost because of your car accident-related injuries. On the other hand, unemployment means that you are ready, willing, and able to work now but cannot find a job. To collect both is often considered fraud, as someone cannot be disabled from accident-related personal injuries and ready, willing, and able to work at the same time.
But not always.
No-Fault wage loss and unemployment benefits can be collected at the same time if a car accident victim is able to work with restrictions. Wage loss and unemployment can also be collected if a car accident victim can do a job he or she sometimes did in the past. Collecting both wage loss and unemployment would not be considered fraud in this particular circumstance.
Under these circumstances, you will still need to have an employer that will allow that person to return to work with medical restrictions.
What is Michigan No Fault wage loss?
For those unfamiliar with this important No-Fault insurance benefit, wage loss compensates you for your wages lost, due to being unable to work because of personal injuries from a car accident. It is paid by your own auto insurance company for up to the first three years after an auto accident under the Michigan No-Fault Act. The Wage Loss Provision will reimburse car accident victims for 85% of wages lost as a result of their personal injuries, up to a statutory monthly maximum that is adjusted every year.
Wage loss is capped, however, and any wage loss above the maximum amount becomes the responsibility of the wrongdoer driver and owner of the car who caused the auto accident.
If you are in a car accident between October 1, 2010 and September 30, 2011, the new statutory maximum for Michigan no-fault (personal injury protection, PIP) wage loss is $4,929 per month for the first three years. The previous maximum for lost wages a person could collect was $4,878 per month.. So if you are out of work due to debilitating injuries from a Michigan car accident, you are entitled to at most, $4,948 each month. Based on the no-fault wage loss formula, which is 85 percent of one’s gross income tax-free, the maximum amount for wage loss equates to an estimated annual income of $70,000. So if you earn less than $70,000 per year, your income should be fully covered by no-fault wage loss benefits in the event of an auto accident.
If you earn more than $70,000 per year, anything you are owed over the statutory maximum is considered “excess wage loss” and is recoverable from the policy of the person who caused the accident.
More Michigan Wage Loss Benefits Facts
Michigan No-Fault wage loss benefits are restricted only to taxable income. Therefore, wage loss benefits do not include heath insurance, pension and other contributions.
Wage loss benefits may be continued past the date of ability to return to work if the job is no longer available to the person injured in the auto accident.
Additionally, a claimant may be entitled to wage loss benefits if an injury leads directly to a further disabling condition, such as drug dependency.
What Other Benefits Are Available Through Michigan No Fault Law?
Medical Expenses & Transportation – Lifetime Benefit:
The Medical Expense Provision provides a lifetime benefit for medical expenses incurred because of auto accident injuries. It is very important that injured victims understand their specific type of insurance, as they may qualify for coordinated benefits. With coordinated benefits, the first party no fault insurance would pay all expenses not covered by the injured victim’s health insurance. With full benefits (not coordinated), the victim’s auto no fault insurance pays all medical expenses incurred even if those are paid by a health insurance provider.
Part of the medical expense provision of the Michigan No Fault Act also provides for reimbursement of transportation expenses. These include expenses for mileage to and from medical offices, hospitals and rehabilitation clinics, or bus and taxi fare when the car accident victim is unable to drive. It is essential that injured persons keep a detailed record of mileage expenses and submit this to the insurance company along with other medical bills.
Replacement Services – 3 Year Benefit
The Replacement Services Provision will pay up to $20.00 a day for any services that an auto accident victim previously performed, but now must hire someone else to handle following the auto accident. Examples include housework, shoveling the snow, cutting the lawn. They could be a husband, wife, family, friends, whoever is doing that, and they’re entitled to be paid at $20 a day. In order to collect this benefit though, a form from your doctor must be filled out stating you’re in need of replacement services and then there is also a form for the people doing the work to fill out as well.
It is also very important to consult with an experienced auto accident attorney who is very familiar with the Michigan No-Fault law before filing for unemployment benefits. It is important to discuss with your attorney how your unemployment status will affect your third-party pain and suffering case.