How Much Is My Income Replacement Benefit Worth?
March 8, 2021
If you have been injured in a motor vehicle accident and have had to take time off work due to your injuries, you may be entitled to a weekly income replacement benefit. I say “may,” as your entitlement will depend upon the extent of your injuries (there is a disability test for entitlement) and the calculation of your income loss.
It can be confusing to try to determine the amount of the weekly Income Replacement Benefit (“IRB”) for which you may be entitled to under the Statutory Accident Benefits Schedule, O. Reg. 34/10 (the “SABS”) after your motor vehicle accident.
This article is intended to provide a method you can use to get a general idea of the value of your Income Replacement Benefit. There are a number of different areas that affect the value of your IRB that are beyond the scope of this article. I have attempted to highlight those areas for you so that you know when it may be a good idea to consult a lawyer or the SABS for further clarification.
If you are under 65 years of age you can obtain a general idea about the value of your Income Replacement Benefit using the following four steps.
1. Determine Your Gross Weekly Income
Your gross weekly income is the income that you received from your employer before taxes and deductions. You will typically need to ask your employer for pay stubs or tax documentation to determine your gross weekly income.
If you were employed at the time of your accident and were not self-employed in the four weeks before your accident, you can choose between two options to calculate your gross weekly income:
a. Add your total gross employment income for the 52 weeks before the accident and divide by 52; or
b. Add your total gross employment income for the 4 weeks before the accident, multiply that figure by 13, and divide by 52.
2. Determine 70% Of Your Gross Weekly Income
To determine 70% of your gross weekly income, take your gross weekly income from step one and use the following equation:
[gross weekly income] X 0.7 = 70% of gross weekly income.
3. Deduct Any Other Weekly Income Replacement Assistance
Your 70% of gross weekly income amount from step two must then be reduced by the total of all other “income replacement assistance” you are receiving per week. For the purposes of this article, we will refer to 70% of your gross weekly income minus your income replacement assistance as your “reduced weekly income”.
Income replacement assistance generally means any gross weekly payments for loss of income that you are receiving or can receive because of the accident by law or under an income continuation benefit plan. For example, income replacement assistance includes short term disability and long term disability payments.
However, the SABS excludes certain assistance from the definition of income replacement assistance. For example assistance like federal employment insurance is typically excluded. These excluded assistance amounts do not need to be deducted from your 70% of gross weekly income amount.
The types of benefits that qualify as income replacement assistance are complex and can change with different decisions in the case law. You should consult a lawyer to determine if the assistance you are receiving should be deducted from your 70% of gross weekly income amount.
4. Determine Whether Your “Reduced Weekly Income” Is More Or Less Than $400.00
For this step you will need your reduced weekly income, which you determined in step 3 by reducing your 70% gross weekly income by any weekly income replacement assistance.
If your reduced weekly income is greater than $400.00, your IRB is $400.00 per week.
If your reduced weekly income is less than $400.00 per week, your reduced weekly income is the value of your weekly IRB. For example, if your reduced weekly income is $200.00, then your weekly IRB will be $200.00.
What if I return to work after my accident?
If you return to work after your accident your IRB may be reduced. You should consult a lawyer to determine how much your IRB may be reduced if you return to work.
What If I was self-employed before my accident?
If you were self-employed before your accident your calculation of gross weekly income is more complex and beyond the scope of this article. Luckily, the SABS provides an option for you. The SABS requires an Insurer to pay up to $2,500.00 for a professional to prepare a report calculating your weekly IRB amount assuming:
- You are applying for an IRB that is based on the employment which the professional writes the report about;
- The professional is a member of a designated body within the meaning of the Public Accounting Act, 2004;
- The report is reasonable and necessary for the purpose of determining your IRB entitlement.
Calculating your IRB is challenging. In simple cases it can be possible to get an idea about the value of your IRB by following the four steps above. In more complex cases a lawyer and accounting professional may be necessary to truly understand your IRB entitlement.
Adam Karakolis is an Associate Lawyer at Thomson Rogers and can be reached at 416-868-3181 or by EMAIL.
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