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Understand how COID defines the percentage of a permanent disability so you can help your employees manage their compensation expectations

by , 25 September 2014
It's a fear all employers share: A workplace accident causing your employee permanent disability. This may not just take away his ability to work, it will affect his quality of life. This is where COID comes in.

Thanks to COID, your employee can get injury compensation for his disability.

But depending on your employee's disability percentage, his compensation might change.

To help you predict the way COID will give your employee compensation, we're revealing how it defines the percentage of a permanent disability...

 

This is a guide to how COID defines the percentage of a permanent disability

 
Permanent disability means your employee never fully recovers from his injury or illness. A permanent disability can completely prevent your employee from working, or it can just inconvenience him. 
 
To determine how the injury has affected your employee, his doctor must write a medical report about the disability. 
 
The Commissioner and a panel of doctors will the work out degree of disability from 1% (not serious) to 100% (very serious). The degrees of disability are set out in Schedule 2 of the Compensation for Occupational Injuries and Diseases Act.
 
Some examples are:
 
  • Loss of two limbs 100%
  • Total loss of sight 100%
  • Loss of hearing in both ears 50%
  • Loss of sight in one eye 30%
  • Loss of one whole big toe 7%
  • Loss of one other toe 1%
 
Here's how the compensation will differ depending on your employee's percentage of disability.
 
*********** Hot off the press  ************
 
COID rejects 80% of all claims! Will it reject yours?
 
 
*************************************
 

Here's how your employee's disability percentage will affect his compensation 

 
CIOD will pay compensation for permanent disability either as a monthly pension or as a lump sum:
 
If the injury is more than 30%, the employee gets a pension; or
If the injury is 30% or less, the employee gets a lump sum.
 
The formula for the monthly pension is:
 
 Three quarters of your employees monthly salary, divided by 100. COID then multiplies this by his percentage of disability which it also divides by 100.
 
[monthly wage x (75 ÷ 100)] x (percentage disability ÷ 100)
 
COID will pay this amount once a month for the rest of your employee's life.
 
There you have it. Now that you know how COID works out percentage of permanent disability, you can predict how it will pay your employee compensation. 


PS: We strongly recommend you check out the COID Compliance Guide. It has everything you need to fully comply with the COID Act.


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