Permanent disability
A stabilized state of lasting reduction in earning capacity, paid as an annuity based on a disability rating and a category scale.
Permanent disability presupposes a consolidated condition, that is, medically stabilized with no further significant improvement expected. It is measured by a rating rather than as a yes or no fact. The French social security system sorts it into three categories by what the claimant can still do. In the first, the claimant can hold some paid work. In the second, they cannot hold any. In the third, they also cannot perform the ordinary acts of daily life without help, which opens a third party care supplement. Supplementary protection cover builds on that classification and pays an annuity until retirement age, when the old age pension takes over. The sensitive point is the contractual entry threshold. Below a given rating nothing is due; between two thresholds the annuity is scaled down pro rata; above, it is full. Two contracts advertising the same annuity can therefore differ entirely in where those thresholds sit. The problem solved is the definitive loss of earning capacity before the age at which retirement takes over.
Article L. 341-4 of the French social security code sets the three disability categories; Articles R. 341-4 and R. 341-5 set their rates. The first pays 30% of the average annual salary of the ten best years, the other two 50%, and the third carries a third party care supplement. Supplementary cover fills the gap to previous income, within what the indemnity principle allows.
- French social security code, Articles L. 341-4 (categories), R. 341-4 (30%) and R. 341-5 (50%)
permanent disability, permanent partial disability, PPD
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