Lifetime Annuity or Capital Sum?

What is an annuity?

Crime victims and rescuers may receive an annuity from IVAC. An annuity is a periodic payment made to a rescuer/victim (or, if the latter is deceased, his/her dependents) as compensation for injuries caused by the situation concerned.

You are eligible for a permanent-disability benefit.

You can opt to receive your benefit in one of two ways—as either a lifetime annuity or a capital sum.

A lifetime annuity is an amount paid every month to victims/rescuers throughout their lifetime.

A capital sum is an amount paid to victims/rescuers once only.

How is the benefit type determined?

Where the monthly amount is greater than $225.33, the permanent-disability benefit consists of an annuity that victims/rescuers receive as long as they live.
Where the monthly amount is less than or equal to $225.33, the permanent-disability benefit may consist of either a lifetime annuity or a capital sum, as the victim/rescuer prefers. The victim/rescuer has to inform the Direction de l’IVAC of his or her choice, within the established deadlines. Otherwise, he or she will automatically receive a monthly benefit for three months; a capital sum will be paid at the end of the potential contestation period, that is 90 days.

In 2020, the amount of $225.33 is the maximum used to determine if the benefit will be paid monthly or as a capital sum. This amount is indexed annually.

Calculate your monthly benefit

It should be noted that three factors are used to calculate the pension:

Net income on the event date: Net income is determined by subtracting the standard employment deductions from the gross employment income: provincial and federal income tax, employment insurance contributions, Québec parental insurance plan contributions and Québec pension plan contributions.
The percentage of permanent disability: % APD + % IRW = % PD;
Period: The calculation is based on a one-year period or 12 months.

The calculation involves multiplying 90% of the net revenue by the percentage of long-term effects determined, divided by 12 months.

For example:

Hélène is 46 years old. She was the victim of a criminal act in January 2013. At the time of the event, she was working as a receptionist. Her gross annual salary was $20,647.44. She is a single parent with three dependent children. During the attack, her hand was broken. Even with medical care and treatment, she continues to experience long-term effects, which limit the mobility of her hand.

The expert physician appointed by the Direction de l’IVAC determined her long-term effects to be 4%.

APD= 4%

The rehabilitation counsellor did not find her unfit to return to work. In fact, her functional limitations do not prevent her from resuming the work she was doing before the event date.

IRW = 0%

4 + 0 = 4% PD

Gross revenue = $20,647.44

90% of net revenue = $16,881.70

Her monthly pension will be:

$16,881.70 x 4%

12 months

= $56.27 per month

Calculate your capital sum

To obtain the amount of the capital, the above monthly pension must be calculated by the actuarial factor.

The actuarial factor is a predetermined number set out in Schedule E of the Workers’ Compensation Act.

The table of actuarial values for capitalization of monthly amount is based on the victim’s age as of the pension calculation date.

For example:

Referring back to Hélène’s case described above:

Her monthly pension will be:

$16,881.70 x 4%

12 months

= $56.27 per month

The approximate amount of capital will be:

$56.27 x $133.43 (corresponding to 46 years of age) = $7,508.42

For additional information, please contact your local Association coopérative d'économie familiale (ACEF) for assistance in making the best decision.

Actuarial values for use in calculating capital sum