Compensation for loss of earning capacity
'Loss of earning capacity' means that an industrial injury has reduced your chances of earning money by working.
According to the Workers’ Compensation Act, you are entitled to compensation for loss of earning capacity if, after the injury, you have a loss of earning capacity of at least 15 per cent.
Compensation for loss of earning capacity can be paid in two ways:
- A lump sum
- Monthly compensation payments
How do we calculate compensation for loss of earning capacity?
The compensation for loss of earning capacity is calculated against the background of your ability to earn money at the date of the injury.
If your loss of earning capacity is determined at less than 50 per cent, the compensation will be paid as a lump sum.
If your loss of earning capacity is determined at 50 per cent or more, the compensation will be paid in monthly instalments.
Even if your earning capacity is reduced by more than 50 per cent, it is still possible for you to get up to 50 per cent as a lump sum if you want. This is called capitalisation.
Are you about to be 2 years away from old-age pension?
Your option to have monthly payments converted into a lump sum lapses when you are 2 years or less from reaching old-age pension.
How to determine loss of earning capacity
We can determine your loss of earning capacity as a direct reduction in pay if you are back at work after your industrial injury.
If you are not back at work, we calculate the compensation for loss of earning capacity on the basis of an assessment of your future chances of earning money through work.
Final or temporary decision
When deciding your loss of earning capacity we can make two types of decisions:
- A final decision or
- A temporary decision
If we make a final decision, we will also fix a date for reassessment of the case. Depending on your situation when we reassess your case, we will make a final or a new temporary decision and fix a new reassessment date.