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Motor Vehicle Accidents and your Entitlement to Statutory Income Replacement Benefits

When a motor vehicle accident (MVA) occurs, the effects it may have on occupants (pedestrians) involved can be devastating. In certain cases, individuals injured in an MVA may not be able to return to work as a result. In the Province of Ontario, the Statutory Accident Benefits Schedule (SABS) has a provision for an entitlement for a weekly income replacement benefit (IRB) for individuals who were employed (even self-employed), and under certain circumstances, unemployed at the time of the MVA. The SABS has a provision that in the event an individual was employed for at least 26 weeks within the year prior to the MVA, that individual may meet a requirement for entitlement. Please note, that the 26 weeks minimum employment requirement is only available to those individuals who are at least 16 years of age at the time of the MVA. If the individual is under the age of 16 but is excused from attending school under the Education Act, that individual may have an IRB entitlement.

Entitlement to IRBs:

The SABS provides that for an individual to be considered to receive an IRB, the individual must suffer an impairment as a result of a MVA. An impairment is defined by the SABS as: “A loss or abnormality of a psychological, physiological or anatomical structure or function.”

When the impairment pre-condition is satisfied, the eligibility of an individual will depend on the length of time that has passed since the MVA.

A) Within Two Year of the MVA:
If an individual’s accident took place within two years of your application for accident benefits, the individual may be entitled to the benefit if the individual can prove that as a result of the MVA, the individual suffered a “substantial inability to perform the essential tasks of your employment”.

B) After two years post MVA:
If more than two years have passed, the individual must satisfy the stricter test of a “complete inability to engage in employment for which he or she is reasonably suited by reason of education, training, or experience.”

Documentation required for consideration of an IRB:

An individual will need to provide the Insurer with the following documentation for consideration of an IRB:

1. OCF-3 (Disability Certificate) – this document is a form which is to be completed by your health practitioner. Once the applicant has completed the parts of the form required by the Insurer, the health practitioner (family doctor, physiotherapist, chiropractor, occupational therapist, psychologist, speech-language pathologist, dentist, nurse practitioner, optometrist) will complete their portion of the form.

2. OCF-2 (Employer’s Confirmation Form) – this document is a form that you will required to provide which contains information regarding the essential tasks of the applicant’s employment and the applicant’s income. If you were an employee, you will have to have your employer to fill out their portion of the form. This form is essential for the insurer to help determine the amount of an IRB that may be payable to an applicant.

3. Medical Clinical Notes and Records – in essentially all cases, the insurer of the applicant will request further medical evidence, such as a chiropractor’s or a family doctor’s clinical notes and records, for evidence that will provide information to the insurer that the impairments caused by the accident are preventing the applicant from going back to work/employment.

Calculation of the IRB:

An individual’s entitlement to an IRB can be best outlined in the following two scenarios:

1. The applicant was less than 65 years of age and eligible for an IRB:
As per the SABS, the IRB is calculated as a percentage of the applicant’s pre-accident employment income. The amount of IRB payable after determination is paid to the applicant on a weekly basis and it will vary whether it has been more or less than two years from the date of the MVA. In a nutshell, the applicant is entitled to receive up to 70% of his/her gross income loss, to a maximum of $400 per week (or higher if he/she has purchased an optional increase from the Insurer) if the IRB is calculated for any period within the first two (2) years from the MVA.  If it is after the two year mark, the quantum payable is the greater amount of either the calculated weekly benefit or $185 per week.  If an applicant is receiving an IRB and turns 65, the amount he/she has received will be reduced by the requirements set forth in the SABS.  The reason this reduction is calculated is due to the fact that 65 is considered as the age of retirement in Canada.

2. The applicant was 65 years of age or older at the time of the accident and is eligible for an IRB:
Although more individuals have been found to continue to work past the age of 65, if an individual was employed at the time of the MVA, the entitlement to receive the IRB would be only for four (4) years. The calculation in the SABS is based on a different formula, and you may want to consult with a legal representative, if you believe this may apply to your circumstances.

The SABS, as well as the entitlement to an IRB, can be quite complex. Although it may seem straight-forward in some respect for an entitlement of an IRB, there are further intricacies to consider when an Insurer is charged with the task to make a determination to pay this benefit. Please note, the information provided above was to only serve as a general outline to help better understand this benefit, and does not constitute legal advice on the IRB.

If you or a loved one was injured in a MVA and are unable to return to work, please contact the personal injury team at Daniel & Partners LLP. to schedule a consult to learn more about whether you may have an entitlement to IRBs as well as other statutory accident benefits available.

Blog post written by Seerat Pershad, associate lawyer at Daniel & Partners LLP.