Average Weekly Wage

What Does Average Weekly Wage Mean?

An average weekly wage is a figure used to calculate disability insurance benefits when a person becomes disabled due to an injury or illness covered by their policy. This calculation is especially relevant for workers’ compensation and disability insurance.

Insuranceopedia Explains Average Weekly Wage

If individuals become disabled but don’t have disability insurance or aren’t eligible for workers’ compensation benefits, they can quickly deplete their savings and face financial hardship. To determine how much disability insurance or workers’ compensation coverage a person is entitled to, their average weekly income must first be calculated. Since these benefits are designed to compensate for lost wages, the amount of benefits issued will be based on this figure.