NJ Temporary Disability Insurance:
Benefits

How to Calculate The Benefit for Temporary Disability Insurance

1. Determine the employee’s average weekly wage (AWW):
   
   
   • Count back over the last 5 completed quarters (see next section for details on how to count back).
     
     
   • Select the first 4 quarters. Add up the earnings over that time period and divide that total amount by the number of base weeks.
     
     
     Let’s look at an example: If the first day of the qualifying condition was  April 13, 2024, it would be calculated as follows:
     

     Previous, Completed Quarters	Total Earnings	Number of Base Weeks	AWW
     Q5 (1/1/24-3/31/24)	$9,500	13 base weeks
     Q4 (10/1/23-12/31/23)	$9,500	13 base weeks
     Q3 (7/1/23-9/30/23)	$7,000	12 base weeks
     Q2 (4/1/23-6/30/23)	$7,000	12 base weeks
     Q1 (1/1/23-3/31/23)*	$7,000	10 base weeks*
     1st 4 Completed Quarters	$30,500	47 base weeks	$648.94

     The AWW would be $30,500/47 base weeks = $648.94,
     
     
2. Apply the 85% benefit factor:
   $648.94 * 85% = $551.60, the benefit payment would be $551.60
   
   
3. Check if it falls within the maximum weekly benefit of $1,055.00:
   The cap would not apply in this case since $551.60 is well below $1,055.00.
   Now, if 85% of the AWW came out to more than the cap, the benefit amount would be $1,055.00.
   
   Let’s look an example for this scenario:
   
If the employee earned $75,000 over the first 4 completed quarters, then the average weekly wage would be $1,595.75; times the 85% factor equals $1,356.38. In this case, the weekly benefit limit applies, providing $1,055.00 per week.

*For this scenario, the employee was hired in mid-January and therefore had qualified base weekly earnings for 10 out of the 13 weeks in the quarter.