The Difference Between Sick Pay and Disability Benefits

In Goldstein v. Department of Public Welfare, 654 A.2d 295 (Pa. Cmwlth. 1995), the court distinguished disability benefits from sick pay. In Goldstein, the petitioner's husband was permanently, partially disabled as a result of a work-related injury and received disability benefits pursuant to a disability insurance policy paid for by his employer. DPW considered the disability benefits to be unearned income, and, as a result, DPW determined that the net income of the petitioner's household exceeded the eligibility limits for purposes of Medical Assistance. the petitioner argued that the disability payments should be treated as sick pay, relying in part on check stubs indentifying the payments as such. The court in Goldstein first concluded that the terms "sick pay" and "disability benefits" are not ambiguous and should be given their plain, everyday meaning. The court next observed that the terms are distinguishable, even though they may overlap in some instances. The court stated that sick pay normally is understood to be a continuation of an employee's wages while the employee is temporarily unable to perform his duties due to illness but remains employed and intends to return to work for the same employer when he recovers. In contrast, the court described disability benefits as payments from an employer-paid insurance policy to an employee who is unable to perform his job due to a disability. Noting that the evidence established that the petitioner's husband was permanently disabled from returning to his previous employment, the court upheld DPW's determination that the payments received by the petitioner's husband were disability payments and were properly characterized as unearned income.