PERSONAL INJURY

Income Replacement Benefit

What is the income replacement benefit?

In Ontario, every motor vehicle liability policy is deemed to provide for the statutory accident benefits set out in the Statutory Accident Benefits Schedule (SABS) pursuant to section 268 of the Insurance Act. This means that if you are involved in a motor vehicle accident, you can file a claim under the SABS for specified benefits. One such benefit you may qualify for is the income replacement benefit (IRB).

Do I qualify?

Section 5 of the SABS sets out the eligibility criteria for the IRB. First, you must have sustained an impairment as a result of an accident.

Second, you must have been employed at the time of the accident and within 104 weeks following the accident you suffer a substantial inability to perform the essential tasks of your employment as a result. The same criteria applies if you were self-employed at the time of the accident.

In the alternative, if you were not employed at the time of the accident you may still qualify if you were:

  1. employed for at least 26 weeks during the 52 weeks before the accident or you were receiving Employment Insurance at the time of the accident,
  2. at least 16 years old or you were excused from attending school under the Education Act at the time of the accident, and
  3. as a result of and within 104 weeks after the accident, suffering a substantial inability to perform the essential tasks of the employment in which you spent the most time during the 52 weeks before the accident.

To support the claim that you suffer a substantial inability to perform the essential tasks of your pre-accident employment, your insurer may request a Disability Certificate (OCF-3) be completed by your health care practitioner. They may also require an Employer’s Confirmation Form (OCF-2) be completed by your employer if you were employed before your motor vehicle accident.

What if I qualify for more than one benefit?

It is possible that you may qualify for two or more of the IRB, non-earner benefit (NEB) and caregiver benefit (CGB). If that is the case the insurer must, within 10 business days after receiving your application, notify you that you have 30 days from when you receive that notice to make an election (s. 35(1)). You must make this election by completing an OCF-10 form.

Once you elect, you can only re-elect under very specific and rare circumstances (see s. 35(2)). In other words, your election is very likely final and should therefore only be made after careful consideration.

How long does the benefit last?

Under section 6 of the SABS, an IRB is payable for the period in which you suffer a substantial inability to perform the essential tasks of your employment. The benefit does not start until after the first week of disability and ends after the first 104 weeks of disability unless you suffer a complete inability to engage in any employment commensurate to your education, training or experience as a result of the accident. “Complete inability” is a tougher test to satisfy. The court provided some guidance on this in Burtch v. Aviva Insurance Company of Canada, 2009 ONCA 479 (CanLII).

The plaintiff in Burtch was a general labourer who, due to his injuries, could not perform the heavy lifting required of his job. There was evidence that a long-haul trucking job was suitable, though the plaintiff did not did not have the licence and could not afford the training program to acquire it. The court found that if substantial upgrading or retraining is not required, the job for which the plaintiff was not already qualified may still be suitable.

If you meet the complete inability test after the first 104 weeks of disability you will continue to receive the IRB, but the amount is reduced to $185 per week.

How much is the IRB?

If you are under the age of 65 your IRB is the lesser of 70% of your gross weekly income (calculated by dividing your gross yearly income by 52 weeks), up to $400 per week, or $185 per week. The amount of your IRB is reduced by all other income replacement assistance (defined in s. 4(1)), if any, that you receive for the same week under section 7 (1).

Under section 47, the amount is also subject to deductions for any collateral benefits you may receive (i.e. short term and/or long-term disability benefits).

IRB amounts will decrease, in accordance with the formula set out in section 8, after the age of 65.

 

The Accident Benefits process can be complex, which is why we recommend you retain the services of a lawyer to ensure you receive the maximum level of benefits you are entitled to.

  • Written by our Student-at-Law, Shuqin Weng

 

Non-Earner Benefit

Please refer to our article on the “Income Replacement Benefit” for background information on the Statutory Accident Benefits Schedule.

If you do not qualify for the Income Replacement Benefit you may qualify for the non-earner benefit (NEB).

Do I qualify?

Section 12 of the Statutory Accident Benefits Schedule (SABS) provides that to qualify for the NEB you must have sustained an impairment as a result of an accident and suffer a complete inability to carry on a normal life as a result.

What does it mean to suffer a “complete inability to carry on a normal life”? Section 3(7)(a) of the SABs states if the impairment caused by your accident continuously prevents you from engaging in substantially all of the activities in which you were ordinarily engaged in before the accident, then you meet the test.

Your mobility, situational responses and cognition for example may affect your ability to carry on a normal life. Activities may include personal care, homemaking, communication, shopping, handling finances, community/social activities, etc.

The meaning of “continuously”, “engaging in” and “substantially” continues to be debated. The leading case on the matter is Heath v. Economical Mutual Insurance Company, 2009 ONCA 391 (CanLII).

The analysis begins by comparing your pre-accident and post-accident activities and life. The pre-accident timeframe to be looked at should not be a snapshot of your life right before the accident, but a “reasonable” period prior to the accident. What is reasonable will depend on the circumstances of the case.

It is not enough to show your life/activities were impacted. Heath tells us that “continuously” means you must prove “disability or incapacity of the requisite nature, extent or degree which is and remains uninterrupted”.

To determine whether an activity is one you were “engaging in”, the way the activity is performed, and the quality of performance will matter. A half-hearted, one-time attempt to do the activities you did pre-accident will not be enough.

If it is pain that prevents you from engaging in an activity, the question is whether the degree of pain you experience practically prevents you from engaging in the activity (as opposed to whether you can physically do the activity at all). For example, if you sustained an injury to your back as a result of your accident and one of your pre-accident activities is soccer, the question is not whether you can play soccer at all anymore, but whether the degree of pain you experience during a game or after the game stops you from playing.

Note that “substantially all” does not actually mean “all” (Galdamez v. Allstate Insurance Company of Canada, 2012 ONCA 508 (CanLII)).

Finally, the court in Galdamez held that working full time does not automatically disentitle you from the NEB. It is recognized that you can suffer a loss in your overall quality of life even though you maintain a job (though rare, it is not impossible).

What if I qualify for more than one benefit?

Please refer to our article on the “Income Replacement Benefit”.

How much is the NEB and how long does it last?

The NEB is $185 per week, minus any other income replacement assistance you may receive for the week (section 12(2)).

Section 3 specifies when the insurer is not required to pay a NEB. Notably, no NEB is required to be paid for the first four weeks after the onset of the complete inability to carry on a normal life or 104 weeks post accident.

 

The Accident Benefits process can be complex, which is why we recommend you retain the services of a lawyer to ensure you receive the maximum level of benefits you are entitled to.

  • Written by our Student-at-Law, Shuqin Weng

 

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