Survivor benefits are calculated based on the employee's earning capacity at what time?

• A. At retirement
• B. At the time of death
• C. At the time of illness or injury
• D. When the benefits are claimed

Answer: (C)

Survivor benefits are meant to replace the income a family loses when a worker can no longer earn due to illness or injury. Because the financial hit comes from the change in earning power that begins at the moment the illness or injury occurs, the benefits are based on the employee’s earning capacity at that time. Using the time of retirement or the time of death would miss the actual loss caused by the illness or injury, and basing it on when benefits are claimed wouldn’t reflect the worker’s changed earning ability from the outset. So, the calculation centers on the time of illness or injury.