Injury annuity

What it means

An injury annuity is an accident insurance benefit paid by the Social Insurance Agency to an employee whose ability to work has fallen by more than 40 % because of a workplace accident or occupational disease. Its purpose is to compensate for the loss of earnings caused by the permanent effects of the injury or illness.

Accident insurance for employees is paid by the employer; employees do not contribute. Entitlement to the annuity arises from the day the reduction in working capacity occurred, and it is generally paid until pension age. The amount depends on average earnings before the accident and the degree of lost capacity, and is capped at a statutory maximum.

The annuity is one of several accident insurance benefits. Others include an accident supplement during incapacity, a lump-sum settlement, a survivors' annuity, rehabilitation and retraining, and reimbursement of treatment costs. Permanent effects can also give rise to compensation for pain and impaired social life.

How it works in practice

For the employer everything begins with the right response to an accident: first aid, recording the incident, investigating the causes and drawing up a report on a registered workplace accident, which is sent to the designated institutions including the Social Insurance Agency. An incomplete or late report complicates the award of benefits and can lead to a fine from the labour inspectorate.

Entitlement is assessed by a Social Insurance Agency medical assessor, who sets the degree of lost working capacity. The employee applies, and the employer provides data on earnings and the circumstances of the accident. If the person's health changes, the annuity may be reviewed, increased, reduced or ended.

The injury annuity does not rule out claims against the employer. The employer is liable for damage from a workplace accident under the Labour Code, and if the annuity does not cover the full loss of earnings, the injured person can claim the difference. It is therefore important to keep health and safety at a good level and consider liability insurance.

What to watch out for

The most common mistake employers make is underestimating minor injuries and not recording them in the accident book. If the effects appear later, documentation is missing and disputes over whether it was a workplace accident are hard to resolve. Every injury should be recorded, even if it seems insignificant at first.

Mind liability for breaching health and safety rules too. If the Social Insurance Agency finds that the accident was caused by the employer's breach of duties, it can claim reimbursement of the benefits paid. The cost of a long-term annuity can be high, so preventing accidents also makes economic sense.