If you have a permanent work-related disability and are eligible to receive ongoing permanent disability benefits, those benefits are usually paid as a monthly payment. In some situations, all or part of the benefit may be paid as a lump sum instead.

What is a lump sum?

A lump sum is a one-time payment that replaces future monthly permanent disability payments.

You automatically receive a lump-sum payment when both of the following apply:

• Your permanent disability is assessed at 10% or less
• Your permanent disability benefit is $350 per month or less

In these situations, you don't need to apply for a lump sum. The payment is made automatically based on our policy.

What is a commutation?

A commutation is when some or all future monthly permanent disability payments are converted into a lump-sum payment at your request.

Who may be eligible for a commutation?

Commutations are considered in limited circumstances only. To be eligible, a commutation must be demonstrated to be in your long-term best interests, according to the criteria defined in policy. To be eligible, you generally must:

• Have a specific purpose for requesting the lump sum
• Show that the lump sum will help improve your long-term financial situation
• Have a stable source of income other than your permanent disability benefits
• Demonstrate an ability to manage your finances

We assess each commutation request on a case-by-case basis and approve requests only in exceptional circumstances.

Examples of when a commutation may be considered

A commutation may be approved to:

• Purchase a primary residence
• Extend or improve a primary residence
• Pay for education or training that improves employment opportunities
• Support a business start-up where there is a strong rehabilitation or return-to-work benefit, and where you can demonstrate a reasonable likelihood of business viability through a business plan, market analysis, financial projections, or other supporting evidence

Examples of when a commutation is usually not approved

A commutation will generally not be approved for:

• Investment purposes
• Purchasing a vacation or rental property
• Paying off debts without clear evidence that it will improve the your long-term financial position
• Reasons based solely on life expectancy or leaving funds to family members after death
• Funding transitional housing or addressing temporary financial hardship without clear evidence that the commutation will improve your long-term financial position

Types of commutations

If approved, a commutation may be:

• Partial — a portion of future monthly benefits is converted to a lump sum, and monthly payments continue at a reduced amount.
• Full — all future monthly benefits are converted to a lump sum, and monthly payments end.

Important things to know

• Monthly permanent disability benefits are the standard form of payment.
• Commutations are an exception and are approved only in limited circumstances.
• Any approved lump-sum amount is calculated using actuarial and financial assumptions that convert future payments into a present-day value.
• Requests are reviewed on a case-by-case basis to ensure they help preserve or improve your long-term financial position.

Interested in a commutation?

Not everyone who receives permanent disability benefits will qualify for a lump-sum payment or commutation. Approval depends on factors such as the type and amount of benefits being paid, the purpose of the request, and whether the commutation is considered to help preserve or improve your long-term financial position.

To find out if a commutation may be an option for you, use our self-screening tool. The tool will help you understand:

• Whether you may be eligible to request a commutation
• The types of situations that may be considered
• Information and documents you may need before submitting a request
• The next steps in the application process

Complete the commutation self-screening tool

Completing the self-screening tool does not guarantee approval of a lump-sum payment or commutation. All requests are reviewed individually and must meet the requirements of WorkSafeBC policy and legislation.