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:
- 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,
- at least 16 years old or you were excused from attending school under the Education Act at the time of the accident, and
- 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
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