Assessing the amount of compensation payable - children
How do we assess the amount of compensation payable to children?
The compensation will be assessed in accordance with Norwegian legislation on compensatory damages and legal precedence. This introduction will explain the practical procedure involved. The most common compensation items in this type of case are:
- standard compensation - children
Standard compensation, children
If a child under the age of 16 has sustained a permanent or significant injury, the child is entitled to standard compensation. The standard compensation is intended to include future loss of earnings as well as permanent injury compensation. Permanent injury compensation is intended as financial compensation for a reduced quality of life. Permanent injuries are usually injuries that will affect you for a period of at least ten years.
Significant injuries are injuries that warrant a medical disability rating of at least 15%. We use a special injury table to determine the rate of medical disability.
When the child's injury warrants a permanent medical disability rating of 100%, the compensation payable will be 40 x the National Insurance Base Rate (G) at the time of payment. Lower disability ratings warrant a corresponding reduction in the rate of compensation payable.
Reasonable and necessary expenses incurred in connection with treatment of the injury will be covered. We do not cover expenses that will be funded by other agencies, such as the Norwegian Labour and Welfare Administration (NAV). The most common items of expenditure in this type of case include:
- nursing and personal care
- car and transport
- adjustments to the home
- patient charges etc.
Nursing and personal care expenses
The Supreme Court of Norway has ruled that we must distinguish between payments intended to cover medical needs, social needs and socio-medical needs. We will explain the difference by providing a few examples:
- Social needs: Activities of importance to the quality of life such as sports and cultural activities, hiking, visiting friends and going to the cinema. Expenses incurred in order to meet purely social needs, are covered by the permanent injury compensation which forms part of the standard compensation.
- Medical needs: Necessary treatment and health care assistance such as treatment by a doctor, hospitalisation, physiotherapy, training, convalescence and medication. These expenses are already covered by the public purse.
- Socio-medical needs: Initiatives that help increase the rate of independence, self-sufficiency and the everyday sense of well-being. These initiatives are intended to make the most of all remaining resources, despite the injury. This assistance will help the child get in touch with other people, maintain his/her level of functionality and increase his/her sense of well-being. The compensation may be used to pay the wages of assistants or personal carers, or to buy further respite services. This will include initiatives that may facilitate a more active life and flexibility. The compensation for nursing and personal care is intended to cover these needs.
The dividing line between medical, socio-medical and purely social needs will often be blurred.
Only extra expenses incurred as a consequence of the injury will be covered. Losses must appear reasonable and necessary, and all assessments will be based on the child's need. Claims for time spent on family-related or social activities will not normally be accepted. Even healthy children have a relatively extensive need for nursing and care during the first years of their lives. Gradually, as they grow older, the difference between the needs of injured and healthy children will increase. The parents' additional input will increase accordingly.
The annual amount of compensation includes cover for the cost of an assistant /escort during holidays and leisure activities. This includes any necessary work required to apply for statutory benefits. The local authority and the Norwegian Labour and Welfare Administration (NAV) are responsible for providing guidance about any benefits to which the patient and his/her family may be entitled.
This compensation ensures that the child will have all nursing and personal care expenses covered. It is additional to the statutory benefits the patient and his/her parents commonly will receive, in the form of a higher rate of health care allowance, care-provider's pay and respite care. These are all initiatives intended to meet the need for nursing and personal care.
The family may choose to meet the need for additional nursing and personal care themselves, or they may choose to purchase the services. In some cases, we find that parents meet this need by reducing their own level of paid employment. If this is the case, any consequential loss of earnings will not be covered separately, but by the compensation awarded to the child for nursing and personal care. The determining factor is not who assists the child, but the child's specific needs.
The general rule is that only the child is entitled to compensation. If a loss has already been incurred, the compensation may nevertheless be paid out to someone other than the child, usually the parents. The cost of all future nursing and personal care will be paid directly to the child.
Car and transport expenses
NPE will cover extra costs incurred as a consequence of the injury. We will therefore compare the family's outlays on travel and transport before and after the injury. The family may be entitled to support towards the purchase of a car from the Norwegian Labour and Welfare Administration (NAV) as well as Basic Benefit to cover any increased transport expenses. The Norwegian Labour and Welfare Administration's level of support will depend on the family income, but the maximum excess payment requested will be NOK 150 000. Any compensation payable for the purchase of a car will need to be assessed in each specific case, and it is important to establish what benefits you are entitled to from the Norwegian Labour and Welfare Administration. If the injury leads to extra costs in connection with buying a car, this will be reimbursed by NPE.
In order to establish the appropriate rate of extra transport costs, we need to take account of the fact that car journeys to and from nursery and school, to doctor's appointments and medical treatments etc. are covered by statutory benefits. Car journeys in connection with social activities are covered by the permanent injury compensation.
If these circumstances are taken into account, many will find that no extra transport costs arise.
Adjustments to the home
If the injury has meant that your home needs to be modified, or that you need to move, such extra costs may be eligible for compensation. What sort of home-related compensation will be relevant, will depend on a number of different circumstances, such as:
- the child's injury and needs
- the residential situation at the time of the injury
- the degree to which the home is suitable for modification
- the need to move
In order to assess this compensation, we will often need to inspect the home.
It is therefore important that you refrain from implementing any changes before you have been in touch with us.
In addition to the items discussed above, other expenses may also arise as a consequence of the injury. Most commonly, these are expenses incurred in connection with medical treatment, medication, physiotherapy and travel. We will not cover expenses covered by other agencies, such as the various expenses covered by the Norwegian Labour and Welfare Administration (NAV) in connection with illness and injury. Exercise equipment of various kinds, as well as technical aids, will normally be made available by the Assistive Technology Centres (Hjelpemiddelsentralen). Your entitlements from the Norwegian Labour and Welfare Administration (NAV) and the Assistive Technology Centres (Hjelpemiddelsentralen) will therefore have to be explored. Children under 16 years of age do not pay a patient charge for medical treatment.
The compensation covers expenses up until the present day (expenses incurred), and likely expenses in the time ahead (future expenses).
The child is entitled to receive interest on any loss the child has incurred until the present time. Interest is assessed 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 calculating the amount payable we allow for the fact that the child 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 was 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.
The child is 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 the child liable to pay wealth tax. In order to compensate for this tax burden, we will supplement the sum we pay out. Please note that children under the age of 21 may be exempt from wealth tax cf. p. 4(22) of the Norwegian Taxation Act (skatteloven). You are therefore advised to contact your local tax office.
Offer of part payment
It will take some time before we are ready make you 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.
The Court of Protection
The Court of Protection is obliged to hold in trust any funds belonging to a minor, if the funds amount to a value in excess of NOK 75 000. The funds are normally held in trust until the child comes of age, at 18.
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.
If you have any queries, please don't hesitate to contact us.