Income Replacement Benefits after an Accident.

For a car accident victim, nothing is more stressful than the lack of cashflow. Accidents can send people into brutal crushing debt. When the cashflow stops all facets of a family’s financial life can be negatively affected, from paying the mortgage or car payments to paying for your kids’ hockey and dancing. Nothing is more stressful on an individual or family than the loss of income.

What are income replacement benefits?

If you or a loved one has suffered a serious injury of impairment because of a car accident, motorcycle accident, trucking accident, bicycle accident or any other type of accident involving a motor vehicle, you may be entitled to what is called an income replacement benefit to help supplement your finances. The payment of Income Replacement Benefits (“IRBs”) can help ensure that a victim of a motor vehicle accident (“MVA”) has financial assistance while they concentrate on their physical/emotional/psychological rehabilitation.

After a car accident, Income Replacement Benefits (IRBs) compensate accident victims for their loss of income from employment or self-employment, so long as the applicant meets the necessary requirements. The SABS puts tight limits on the amount of income that can be recovered under the SABS, and many applicants will find that the income replacement benefits they receive do not adequately compensate them.  Many will have to look to a lawsuit against the at-fault motorist who hurt them to recover additional loss of income. If you have been in an accident – call us for your free consultation today at 905-333-8888 or send us an email through our website.

How much income replacement can I receive?

Starting one week after the accident, IRBs compensate an insured person for 70% of gross income up to a weekly maximum of $400. The maximum amount can be higher if you purchased optional benefits prior to your accident. 

Who is entitled to receive an income replacement benefit?

Initial entitlement to income replacement benefits depends on whether or not you were working at the time of the accident.

Were you were working at the time of the accident?

In order to qualify for income replacement benefits, you must have been employed or self-employed at the time of the accident, developed an impairment as a result of, and within the first 104 weeks after, your accident and suffered a substantial inability to perform the essential tasks of your employment or self-employment.

Were you not working at the time of the accident?

If you were not working at the time of the accident you may still qualify for income replacement benefits. In order to qualify you must not have been employed or self-employed at the time of the accident, you are at least 16 years old, employed for at least 26 weeks during the year prior to the accident; or you were receiving benefits under the Employment Insurance Act, S.C. 1996, c. 23 (Canada) at the time of the accident. In addition, you must have developed an impairment as a result of, and within the first 104 weeks after, your accident and have suffered a substantial inability to perform the essential tasks of your employment in which you spent the most time during the 52 weeks before the accident.

How is a “self-employed” individual defined?

Income replacement benefits apply to both employed and self-employed applicants. Under section 3(1) of the SABS a self-employed person is either a:

• Sole proprietor or partner, other than a limited partner, of a partnership engaged in a:
• trade;
• occupation;
• profession; or
• other type of business.
• Controlling mind of a business:
• carried on through one or more private corporations; and
• who owns some or all of the shares of the private corporation(s).

The SABS defines “self-employment” as “a trade, occupation, profession or other type of business the essential tasks of which are carried on by a self-employed person”.

What happens after two years or 104 weeks of collecting income replacement benefits?

After the 104th week post-accident the criteria for continuing to collect income replacement benefits changes. The majority of IRB denials occur at the 104 week mark as the test for IRBs changes at that time. After 104 weeks you must suffer from a “complete inability to engage in any employment or self-employment for which you are reasonably suited by education, training or experience” as opposed to the pre-104 week test of “a substantial inability to perform the essential tasks of your pre-accident employment”. After the two year mark, your insurance company will put you through a series of medical tests with their own doctors to determine if you are still entitled to income replacement benefits.

When do income replacement benefits start, and how long do they last?

Payment of income replacement benefits are payable after the first week of your accident or disability and last as long as you meet the relevant pre or post-104 week disability test. Also, although IRB payments may continue until your death, the amounts of the benefit will be recalculated after you turn 65.

How do I apply for an income replacement benefit?

You must submit an application for accident benefits. You must elect between a non-earner benefit or an income replacement benefit and you must submit a disability certificate (OCF-3). Your insurance company will provide you with an application with accident benefits (which we can of course help you fill out).

You can also find a copy of the Disability Certificate on the FSCO website.  Your Disability Certificate is divided into 10 parts. Parts 1-4 are to be completed and signed by the claimant before giving the form to a health practitioner. The health practitioner then completes the rest and submits it to the insurance company. You may want our help with this to ensure consistency and accuracy.

Parts 5-10 are to be completed and signed by one of the following health practitioners:

• Chiropractor.
• Dentist.
• Nurse Practitioner.
• Occupational Therapist.
• Optometrist.
• Physician.
• Physiotherapist.
• Psychologist.
• Speech Language Pathologist.

The list is broad, and the Disability Certificate will carry more weight if it is completed by a health practitioner:

• Whose area of practice is related to the primary diagnosis.
• Who treated the claimant prior to the accident.
• Who is funded by OHIP.

Your family doctor is often a good choice.

Determination your continuing entitlement to Income Replacement Benefits

Your insurance company is entitled to re-evaluate from time to time whether you remain entitled to collect income replacement benefits. If your insurance company wishes to re-evaluate your continuing entitlement to income replacement benefits, it may request any or both of the following:

• That you submit a new Disability Certificate within 15 business days. The certificate must be dated after the date of the insurer’s request.
• That you attend what is called a “section 44 assessment”. What is a s. 44 assessment? When a plaintiff who has been involved in a motor vehicle accident opens an accident benefits claim (whether with their own insurer or, if they are uninsured, a third party’s insurer), they may be eligible to receive payment of certain benefits depending on their automobile insurance contract and the severity of their injuries. The insurer will, at some point, want to determine if the insured is, or continues to be, entitled to receive a particular benefit. The insurer will use section 44 of the Statutory Accident Benefits Schedule – to request one or more examinations of the insured to help make this determination. In other words, your adjuster will review your medical, rehabilitation, employment and/or other records to determine if your income replacement should continue to be paid. Often times, adjusters do not have the requisite medical training or expertise to determine if an insured should continue receiving a particular benefit. The section 44 examination allows your insurer to get an opinion from a regulated health professional or a vocational expert to help them determine whether or not you remain entitled to collect income replacement benefits.
• After you attend the section 44 independent examination, and within ten business days of receiving the section 44 independent report, your insurer must give you and your health practitioner who completed your disability certificate and provide you with a notice of determination setting out if it agrees to pay or not pay your income replacement benefit, the reasons for the decision, and the stoppage date.

When can your insurance company stop paying your income replacement benefits?

Your insurance company can only stop paying your income replacement benefits in the following circumstances if:

• you fail or refuse to submit a new disability certificate;
• if you do provide a disability certificate and the disability certificate does not support ongoing entitlement;
• a section 44 report has determined you are no longer entitled.
• if you have resumed your pre-accident employment duties.
• If you did not attend a section 44 assessment, or did not cooperate once there.

If my insurance company is cutting-off my benefits, to they have to give me advanced notice?

yes. prior to stopping the payment of your income replacement benefits, your insurance company must send you a notice advising you of all the reasons, medical and otherwise, for the denial.

What can de deducted from your Income Replacement Benefits?

There are a number of deductions permitted from the IRB benefits, including the following:

1. Canada Pension Plan Disability Pension Benefits (CPP)
2. Periodic payments of insurance
3. Any gross weekly payments for loss of income received or available to the person as a result
   of the collision (i.e. employment insurance, disability benefit plans, workers compensation)
4. Collateral benefits (temporary disability benefits and periodic payments.

It’s best that you speak to an experience accident lawyer if your insurance company is trying to deduct from your income replacement benefit.

What happens to your income replacement benefits after you turn 65?

Remember, once your initial entitlement and amount of your income replacement benefits has been determined you will continue to receive IRBs so long as you continue to meet the qualifying criteria. These criteria change at two important times:

• When 104 weeks have passed since your accident. After the 104th week post-accident the criteria for continuing to collect income replacement benefits change. After 104 weeks the claimant must suffer from a “complete inability to engage in any employment or self-employment for which he or she is reasonably suited by education, training or experience”
• When you turns 65 years old and you are already receiving income replacement benefits at the time you turn 65 years old, you will see a decrease in the amount of your IRB but will no longer be subject to any entitlement criteria. No matter what level of impairment you have you will receive the adjusted amount until your death.

How do you calculate IRB entitlement after the age of 65?

If you are receiving income replacement benefits prior to turning 65, you will see a decrease in the amount of your IRB upon turning 65.The change will be made on the latter of (section 8(1), SABS):

To calculate the adjustment, one would apply the following formula:

A. Take the weekly income replacement benefit amount you were receiving prior to turning age 65, but do not deduct for post-accident income from employment or self-employment.

B. Calculate the number of years claimant qualified for the IRB. Maximum is 35.

C. Multiply: A x 0.02 x B

Example A: Claimant A was receiving $400.00 per week for 10 years prior to turning 65.The calculation is: $400.00 x 0.02 x 10 = $80.00 per week.

Have you been involved in an accident and need to discuss your income replacement benefits?

If you have been involved in an accident and need to discuss your accident benefits – or income replacement benefits, you can email us through out website or call us today at 905-333-8888 today. Our Hamilton Car Accident Lawyers have been helping victims with serious injuries since 2003 – and we would be more then happy to speak to you about your case. remember – we NEVER charge for consultations, and we NEVER ask our clients for money upfront.