Employment Insurance (EI) benefits are explicitly included as a component of gross employment income per the Statutory Accident Benefits Schedule (SABS). Subsection 4(1) defines Gross Employment Income as “salary, wages and other remuneration from employment, including fees and other remuneration for holding office, and any benefits received under the Employment Insurance Act (Canada)…”
So, why the need for a blog post?
EI benefits can be more than just a component of an individual’s pre-accident income, they can also be the basis of their eligibility for an Income Replacement Benefit (IRB).
The Many Roles of EI Benefits
Eligibility is the first question that must be addressed when starting to calculate an IRB. EI benefits are important in determining an insured’s eligibility if they are unemployed at the time of the motor vehicle accident. If an insured is receiving EI benefits at the time of the accident, they qualify for an IRB, as per s. 5(1)1.ii of the SABS. Continue reading
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.
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.
The Henderson-Briehl arbitration decision became the guide for calculating pre-accident income for an individual who had both employment income and self-employment losses under the Old SABS (O. Reg. 403/96). However, the New SABS (O. Reg. 34/10) appears to revert back to the methodology which was regularly used prior to that decision. As such, from September 1, 2010, self-employment losses can offset employment income in calculating an insured’s pre-accident income.
Even if the insured has returned to work, they may still be eligible for an Income Replacement Benefit. Know the scope of pre-accident activities before making a decision, as the insured may still qualify under the substantial disability test.
When it comes to calculating income, it is not always as straightforward as how much salary an employee earns on their paycheque. Sometimes income also comes in the form of goods and/or services.
But what are you to do if an insured tells you they were provided with an apartment rent-free in exchange for working as a handyman in a building?
How do we translate those goods and services into income when determining Income Replacement Benefits (IRB)?
The most important thing to remember is that goods and services earned through Continue reading