Tag Archives: loss of income

When Are Payments for Loss of Income Deductible?

Summary: The New SABS (O. Reg. 34/10) have introduced changes which will require continued efforts on the part of an adjuster to confirm what benefits may be considered payments for loss of income, and subsequently, what will be deductible as other income replacement assistance.

Payments for loss of income which are deductible from an IRB are outlined in paragraph 3(7)(d) of the New SABS.  This paragraph is a change from the Old SABS subsection 2(9), apparently codifying previous FSCO arbitrations decisions, such as Sharma-Singh and Co-operators General (A07-000588).

For details on other income replacement assistance, we refer you to our ADS Blog.

So what changes did the New SABS bring?

Insurance Contract – The first change deals with contracts under which periodic payments of insurance are deemed to be payments for loss of income.  Specifically, payments are now deemed to be payments for loss of income “irrespective of whether the contract for the insurance provides”:

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How do Canada Pension Plan Disability Benefits impact the IRB?

Summary:

If received, CPP disability benefits are deductible as other income replacement assistance in calculating the IRB payable. But it is important to understand the interplay with other benefits, and other components of CPP disability benefits that shouldn’t be considered.

Background:

This discussion must start with qualifying for the Canada Pension Plan (CPP) disability benefits. An insured may qualify to receive CPP disability benefits if they:

  • are under 65 years of age;
  • meet the CPP contribution requirements; and,
  • have a severe and prolonged disability.

That said, the insured must be approved by a Service Canada medical adjudicator, which takes approximately four months, and the decision is based on a number of requirements. This just means there is no certainty when or if benefits will be received.

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