Income Replacement Benefits Defined
Income replacement benefits (“IRBs”) are just one of many benefits available under the Statutory Accident Benefits Schedule – Effective September 1, 2010 (“SABS”) for persons who have been involved in a motor vehicle accident.
Generally, IRBs are payable for the period in which an insured person suffers a substantial inability to perform the essential tasks of their employment or self-employment (s. 6(1)). After the first 104 weeks of disability, the insurer is not required to pay IRBs unless, as a result of the accident, the insured person is suffering a complete inability to engage in any employment or self-employment for which they are reasonably suited by education, training or experience (s. 6(2)(b)).
As noted above, if an insured person is able to engage in reasonably suitable employment, they will not meet the test for entitlement to post-104 week IRBs. The Ontario Court of Appeal has consistently held that a suitable alternative occupation must be reasonably comparable to the insured person’s former job in both status and reward/wages (Burtch v. Aviva, 2009 ONCA 479 at para 15).
Income Replacement Benefits Awarded for Part-Time Work in McLean
In McLean v. Primmum Insurance Company, the issue was whether Laura McLean, the applicant, met the post-104 week test for IRBs pursuant to s. 6(2)(b) of the SABS. Prior to her motor vehicle accident in 2017, Laura worked at Mohawk College as a part-time professor teaching recreation therapy 1 to 6 hours per week, and as a field placement specialist 15 to 24 hours per week. Since the accident, Laura was only able to work a maximum of 6 hours per week.
The License Appeal Tribunal (“Tribunal”) reaffirmed the well-established principle that reasonably suited employment should be comparable in status and reward (para 42). The Tribunal then asked the following question: does an inability to engage in reasonably suitable employment for substantially similar work hours as an insured’s pre-accident level make them eligible for post-104 week IRBs? The Tribunal found that it does.
The Tribunal applied the definition of “complete inability” in s. 3(7) of the SABS by analogy to s. 6(2)(b) and summarized the test for post-104 week IRBs as whether the applicant sustains an impairment that continuously prevents her from engaging in substantially all of the essential tasks of the employment that is reasonably suited based on her education, training and experience (para 44). In applying this test, the Tribunal held that if an insured person is only able to work at 30% capacity of a specific employment compared to her pre-accident capacity, then that person cannot be engaging in substantially all of the essential tasks of that occupation (para 44).
Due to her post-accident impairments, Laura was diagnosed with an adjustment disorder with mixed anxiety and depressed mood, specific (isolated) phobias, and persistent insomnia disorder. Based on Laura’s psychological impairments, a psychologist testified before the Tribunal that Laura could only work at 25% to 30% capacity or no more than 6 hours per week at the reasonably suitable occupations identified by a vocational expert (para 47). The Tribunal accepted this evidence and found that Laura was therefore entitled to post-104 week IRBs.
In sum, the Tribunal has seemingly confirmed that an ability to work at only 25% to 30% capacity of one’s pre-accident hours at reasonably suitable employment will constitute a complete inability and entitle an insured person to post-104 week IRBs if it fails to yield the same status and/or income as their pre-accident employment (para 43). By contrast, if the post-accident reduction in working capacity is met with the same pre-accident income and status, then the insured person will not be entitled to post-104 week IRBs.
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Written by Carlo Panaro