A lump sum payment is a single payment of benefits. If you accept a permanent disability award as a single payment, the lump sum payment will generally be calculated based upon a loss of labor market and wage loss capacity.
A loss of labor market is the difference between the amount of jobs that the worker had available to him or her prior to the accident and the amount of jobs available after the accident. Based on that computation, a certain percentage will result.
The second computation would be based on the wage loss capacity. Similar to the other factor described above, this too is the difference between the amount of money the worker was capable of earning prior to the accident and what the worker is capable of earning after the accident. This will also result in a percentage.
These two percentages are typically then averaged together resulting in a final percentage and thus the basis for the benefits received.