The Role Employment Insurance Benefits Play in Calculating an IRB

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.

The next step is determining for which period an insured’s pre-accident income would be calculated. This can be determined under s. 4(2) of the SABS. If an insured qualified for an IRB only because of their receipt of EI benefits at the time of the accident, specifically they were unemployed at the time of the accident, the insured’s gross employment income prior to the accident would be determined based on the 52-weeks before the accident (s.4(2)2.ii), and not the four-weeks.

Regardless of how the insured became eligible for an IRB, in calculating an insured’s gross employment income, any EI benefits received in the elected period would be included as income. This is explicitly stated in the definition of gross employment income (s. 4(1)).

EI Benefits and Determining 26 of 52 weeks

For an individual who was unemployed at the time of the accident, in addition to being eligible for an IRB if they were receiving EI benefits at the time of the accident, they may also be eligible if they worked 26 of the 52-weeks prior to the accident (s.5(1)1.ii of O. Reg. 34/10).

It is important to note in this situation, that under both the previous (O. Reg. 403/96) and current SABS, an insured had to be employed for 26 weeks. The receipt of EI benefits for a week, does not qualify as a week of employment.

But what about post-accident?

When it comes to the post-accident period, EI benefits are not deductible as Other Income Replacement Assistance, as per section 4(1)(a)(i) of the SABS. They are also not deducible as Collateral Benefits, as per section 47(3).

While we recognize that at times an insured may continue to receive EI benefits after an accident, it is most likely because they have not informed Service Canada that they are injured and unable to work. A requirement to receive EI benefits, is that an individual must be “ready, willing, and capable of working each day” (www.servicecanada.gc.ca). Regardless, EI benefits are not deductible as income after the accident.

Other Income under the Employment Insurance Act

Up to now we have only been talking about EI benefits. But other benefits are available under the Employment Insurance Act. For more details we recommend you search Employment Insurance Act on the www.adsblog.me site, for related posts.

How Do I Get Documentation to Support Receipt of EI Benefits?

The insured should be able to print out information pertaining to the number of weeks and amount received from EI Benefits directly from their My Service Canada Account at www.servicecanada.gc.ca. You can also call Service Canada at 800-206-7218.

Why it matters to you?

If an insured is earning EI Benefits at the time of the MVA they automatically qualify for IRBs. All EI benefits received within the appropriate pre-accident period would be included in the calculation of an insured’s Gross Employment Income. As such, understanding when and how much an insured received under the Employment Insurance Act, including EI benefits, is a must for quantifying an IRB.

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