The Policy & Regulation Development Bureau developed a discussion paper on "Criteria for Commutation".

As a result of legislative changes to the Workers Compensation Act ("Act") relating to permanent partial disability awards and retirement benefits, the Board conducted a review of its commutation policies. At time of consultation, if the permanent disability periodic payment was not more than $100 per month and the capitalized value does not exceed $40,000, the Board would award a lump sum in lieu of monthly payments. For monthly permanent disability periodic payments valued at not more than $125 per month and with a capitalized value of not more than $60,000, the worker was usually offered the choice of a monthly permanent disability periodic payment or a lump sum. Generally, where the monthly periodic payment was more than $125 per month or the capitalized value exceeded $60,000, no commutation was granted. There were, however, certain situations provided for in policy where a commutation might be considered. Of consideration was whether it was in the worker's long-term interests to receive a commutation. Criteria included whether the commutation would enhance the income position of the worker and, whether the worker had a stable source of income other than the disability award.

Current Board policy on commutation made a distinction between a permanent disability award granted under section 23(1) of the Act and those provided under section 23(3) of the Act. In the latter case, there was no eligibility for a commutation award where the monthly periodic payment was more than $125 per month or the capitalized value exceeded $60,000.

Both the Core Reviewer of workers' compensation legislation and policies and the Administration expressed concern about the existing criteria for commuting permanent disability awards.

Consultation closed July 26, 2002.