Overpayment situations can be stressful and complex. Especially where Income Replacement Benefits (IRB) had at one time been terminated and then reinstated, or one or more sources of other income replacement assistance may have been retroactively paid, and possibly at different times. And of course, the overpayment could just be due to calculation error.
We focus only on the recovery period in this
post, which for overpayments is limited to the 12-months prior to a valid notice of overpayment being
issued by the insurer.
But what makes the notice valid? For the answer to this we need to look at
s.52 of the SABS and recent decisions.
What happens when income is paid in goods and
services (payment in kind)?
When it comes to calculating
income for SABS purposes, it is not always as straightforward as the wages on a
pay statement. Occasionally, income comes in the form of goods and/or services.
How do we translate those goods
and services, such as living rent-free in exchange for working as a handyman in
an apartment building, into income when determining an Income Replacement
In a recent LAT decision, the adjudicator determined “An Employer’s Confirmation Form is information reasonably required to assist within the meaning of s. 33(1)” of the SABS (17-005692 v Aviva Insurance Company of Canada).
But can the form really stand alone as the basis of an Income Replacement Benefit (IRB) calculation? We suggest that in most cases, it cannot. Although there are exceptions.
The Role Employment Insurance Benefits Play in Calculating an Income Replacement Benefits (IRB)
Employment Insurance (EI) benefits appear in many ways within IRB calculations. They can be the entire basis of eligibility for an IRB, a component of an individual’s pre-accident income, or received post-accident as a form of payment for loss of income.
This blog provides all you need to know about how to treat EI benefits in your calculations.
Don’t blink or you may miss it!
Don’t blink or you may miss it being posted.
Summary: There does not appear to be any significant changes to what should be considered in calculating the Gross Income for a claimant under the New SABS. However, we finally have a definition.
We have previously explained what is included in Gross Income from Employment as it relates to the SABS-1996 (see link at bottom of this post).
So what has been the impact of the changes in these New SABS?
As we mentioned in our blog post on common errors and deficiencies found in the OCF-2 form, there are ways to make the form work better for you.
By requesting not only the correct supporting documentation, but asking the right questions, as well, you can ensure a correct Income Replacement Benefit (IRB) calculation every time.
Let’s start with the documentation. Why are these so important?
As noted in our previous blog post, the people completing the OCF-2, don’t always have the requisite knowledge to correctly and completely provide answers to the questions they are asked. As such, supporting documentation helps to support the amounts noted on the OCF-2, and ensure it has been completed correctly. Continue reading
Generally, loans received by an insured, regardless of the source, are not considered income for IRB purposes. But, as with most situations, and because this would be a really short topic otherwise, it’s not quite so cut and dry.
Traditionally, this issue is more prevalent after an accident than before, but the same principles apply. Whether it is a self-employed individual who cannot work post-accident and is taking loans from their business to survive, or an employee who is receiving loans from his employer, family, or friends, you need to understand whether the receipt of money is related to employment or self-employment activities.
Subsection 4(1) of the SABS defines gross employment income as “salary, wages and other remuneration from employment…”
Subsection 3(1) of the SABS defines self-employment as a “trade, occupation, profession or other type of business…” It would appear then that income from self-employment would be as a result of providing services as a business to customers in return for money or other payment type.
The interest rate on overdue benefits is now payable at a rate of 1% per month, compounded monthly, for accidents on or after Sept. 1, 2010.
Any accidents prior to Sept. 1, 2010, are still payable at the rate of 2% per month, compounded monthly.
What does this mean?
The current low interest rate environment might have helped insurers, as the New SABS (Ont. Reg. 34/10) dropped the interest rate on overdue payments from 2% to 1%.