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monthly benefit could not exceed the maximum benefit or be less
than the minimum benefit, the amount of the monthly benefit was not
affected by the severity or nature of the illness or injury that
caused the employee’s disability.
Payments from a disability plan do not qualify for the section
105(c)(2) exclusion if the payments are the same regardless of the
nature and severity of the particular injuries causing the
disabilities. Hines v. Commissioner, 72 T.C. 715 (1979). Under
the UNUM policy, an employee who was disabled because he had lost
a leg was entitled to the same benefits as one who was disabled
because he had lost both legs, another limb, or his sight, suffered
kidney failure, or had a heart attack or a stroke. Such payments
are not based upon the type and severity of the injury as required
by section 105(c)(2). Colton v. Commissioner, T.C. Memo. 1995-275.
Petitioner contends that the benefits were computed by
reference to the nature of the injury because the UNUM policy
distinguished between physical injury or illness and mental
illness. We disagree.
The monthly benefit for a total disability caused by mental
illness did not differ from the monthly benefit for a total
disability caused by physical injury. The benefit period (and thus
the total benefit) for a disability caused by mental illness could
be shorter than the benefit period for a disability caused by a
physical illness or injury, only if the employee was under age 65
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