The lump sum is not taxable, by the way, just to clarify that point.
The amount that's paid is based on the extent of the disability. That is a requirement in law. It's based on a quasi-statutory document called a “table of disabilities”. Maybe the person who wrote this scenario was trying to estimate on the conservative side or the low side what the amount of the award would be. But I'd actually be surprised that for a spinal cord injury, something of that severity, it would not be at 100%. But recognize that there is a range of assessment of disability. At this amount, it would be about 80%.