Assessing the amount of compensation payable - general

Normal compensation items are:

• Permanent injury compensation
• Loss of earnings
• Household work
• Expenses

The amount payable will include any financial loss you have suffered (loss incurred) as well as any loss you will suffer in the future due to the injury. You will receive interest on any loss incurred, as well as compensation for the tax burden caused by future losses. Future annual losses will be paid out as a lump sum. See below for further information.

Permanent injury compensation

If you have sustained a permanent and significant injury, you will be entitled to permanent injury compensation. Permanent injury compensation is

awarded for the loss of quality of life, irrespective of whether you have suffered a financial loss. "Permanent injury" normally means that the injury will affect you for a period of at least ten years.

A significant injury means that the consequential rate of medical disability is at least 15%. We use a special injury table to determine the rate of medical disability.

The calculation is based on the rate of medical disability, the patient's age at the time of the injury and the National Insurance Base Rate.

Loss of earnings

If you have incurred or will incur a loss of earnings as a consequence of your injury, this loss will be covered. In order to assess the loss, your income levels with and without the injury are compared; the resulting difference is the loss to be covered. The compensation is intended to cover your net loss. Your disposable income after tax should be the same as if the injury had never happened. When calculating the compensation, we deduct any benefits you may receive as a result of your injury, such as incapacity benefit. We will also need to take into consideration the fact that you will save the cost involved with employment, e.g. travel expenses, trade union dues and pension contributions. We will also take into account of the fact that your injury entitles you to a special tax allowance. You will be liable to pay tax on any compensation received for loss of earnings, and this tax will be added to the compensation we pay you. Compensation for net future losses will normally be restricted to pension age. It may also be appropriate to award compensation for loss in pension amount.

Household work

If the injury has rendered you incapable of carrying out normal household chores, we will cover the cost of having this work done. Normal household chores include housework, home maintenance, gardening, lawn mowing, snow clearance and shopping. The amount of compensation payable will depend on the extent of the injury, the residential situation, the family situation etc. You will need to help restrict the consequences of the injury by adjusting to and taking account of the new situation. As far as possible, we expect household chores to be redistributed. A natural starting point will be the cost of buying the services required. The legal precedence is at a sober level.

Expenses

Reasonable and necessary expenses incurred as a consequence of the injury will be covered. The most common categories are expenses incurred in connection with medical treatment, medication, physiotherapy and transport. In some cases, the cost of modifying your home and of help in your everyday life may also be eligible. The compensation includes expenses incurred until the present day (expenses incurred) as well as probable expenses in the time ahead (future expenses). We do not cover expenses that may be claimed from other sources, e.g. the Norwegian Labour and Welfare Administration (NAV) will cover various expenses in case of ill health and injury. Various types of exercise equipment and technical aids will normally be made available by the Assistive Technology Centres (Hjelpemiddelsentralen). You will therefore need to investigate what you can have covered by the Norwegian Labour and Welfare Administration (NAV) and the Assistive Technology Centres (Hjelpemiddelsentralen).

Interest

You are entitled to interest on any loss you have suffered until the present. For lost earnings, interest is assessed on the net loss. The interest is calculated per year of loss, but from no earlier than one month after we received your injury report form.

Assessing future losses

Compensation for future losses will be paid out as a lump sum. Even if the loss will spread over a number of years ahead, the amount will be made available to you up front. When assessing the amount payable we allow for the fact that you will be earning interest on the money. This is referred to as capitalisation and can be illustrated by an example: An annual future loss of NOK 10,000 per year for ten years would result in a profit if a payment of NOK 100,000 were paid up front, because you would earn interest on the sum received. Because we take account of this interest earned, a payment of NOK 79,150 will cover an annual loss of NOK 10,000 for ten years.

Tax

You are liable to pay tax on any interest earned on the lump sum paid out to cover future losses, cf. above. Furthermore, a payment from NPE may make you liable to pay wealth tax. In order to compensate for this tax burden, we will supplement the sum we pay you.

You are not liable to pay tax on compensation received for

• Permanent injury compensation
• Future loss of earnings
• Household work
• Expenses

You are liable to pay tax on compensation received for:

• Loss of earnings till the present time (loss of earnings incurred)
• Interest

We report all compensation payments to the Norwegian tax authorities. If the compensation is for loss of earnings over a number of years, you should enclose with your tax return a document that shows the years to which the compensation applies, as well as the amounts payable for each individual year.

Offer of part payment

It will take some time before we are ready to make our final offer of compensation. Payment of part of the compensation may therefore be appropriate. Please get in touch with us if you need this sort of arrangement to be made.

Are you entitled to have your legal costs covered?

If you feel the need for legal advice in connection with the assessment of compensation, NPE will cover any reasonable and necessary costs. The reasonable and necessary level of assistance will be considered by NPE on a case-by-case basis.