No one ever gets into a car anticipating that they might get into a car accident, yet all drivers are gravely aware of the possibility every time they get behind the wheel of a vehicle.
That is why insurance companies exist and it is also the reason that in Ontario, all insurance providers of automobile insurance coverages are required to provide accident benefits to the insured party by way of the Statutory Accident Benefits Schedules (SABS).
The SABS is regulated under the Ontario Insurance Act, and have been put in place by the Ontario government in order to help the insured party pay for out-of-pocket injury-related expenses such as health costs not covered by OHIP, as well as provide the insured with an avenue for income replacement should they meet the requirements under the SABS.
Standard benefits available under the SABS include:
- Non-earner benefits.
- Income replacement benefits.
- Caregiver benefits.
- Medical and rehabilitation benefits.
- Death and funeral expenses.
- Childcare expenses for stay-at-home parents if they are unable to care for their children as a result of the injury.
- Costs to assist an injured person while at home.
- Housekeeping costs.
- Repair or replacement of eyeglasses, clothing and other personal items damaged in the accident.
This emphasis of this article is specifically focused on non-earner and income replacement benefits under the SABS.
What are Non-Earner Benefits?
If you are an insured driver in Ontario and you are injured in a car accident you may qualify for non-earner benefits. To be approved for the benefit you must meet certain conditions set out in Part II of the SABS. Non-Earner Benefits are intended to compensate you if you suffer a complete inability to carry on a normal life post-accident.
How to Qualify For Non-Earner Benefits
Under the SABS, you may qualify for non-earner benefits if:
- You were unemployed or retired at the time of the accident or
- You were a full-time student or a recent graduate (within one year of graduation) at the time of the accident.
In addition to being unemployed, a student, or a recent graduate, you must be found to suffer a “complete inability to carry on a normal life” as a result of and within 104 weeks after the accident.
For accidents that occurred after June 1, 2016, the non-earner benefit of $185 per week is payable after a four week waiting period. This means that as a victim of an accident, you would have to wait at least four weeks from the date of the accident to be able to take advantage of these benefits. These benefits are payable to a maximum of two years post-accident.
The core of qualifying for the non-earner benefit hinges on whether you suffer “a complete inability to carry on a normal life.” This has been interpreted to mean that you have sustained an impairment that continuously prevents you from engaging in substantially all of the activities you normally engaged in prior to your accident.
In determining whether you meet the criteria, the courts will look at a number of different factors. The Ontario Court of Appeals stated that the following factors should be considered when determining entitlement to non-earner benefits:
- The claimant’s activities and life circumstances before the accident are to be compared to their activities and life circumstances after the accident. Courts are to assess the claimant’s activities and circumstances over a reasonable period of time prior to the accident.
- All of the pre-accident activities the claimant normally engaged in, prior to the accident, are to be considered. Courts are to give greater weight to the activities identified as important to the claimant’s pre-accident life.
- The claimant must establish that changes in their post-accident life continuously prevented them from engaging in substantially all of their pre-accident activities. Courts must view a claimant’s activity as a whole.
- A claimant who goes through the motions of activity will not be found to be engaging in that activity. The courts are to consider the quality of performance of an activity post-accident.
- When pain is a factor, the courts must consider whether the degree of pain experienced is preventing the claimant from engaging in pre-accident activities.
Section 12(3) of the SABS specifies the following circumstances under which an insurer is not required to pay the non-earner benefit:
- For the first four weeks after the onset of the complete inability to carry on a normal life;
- Before the insured person is 18 years of age;
- For more than 104 weeks after the accident; or
- If the insured person is eligible to receive and has elected under section 35 to receive either an income replacement benefit or a caregiver benefit under this part of the Schedule.
How are Non-Earner Benefits Determined?
The following factors are taken into consideration when determining whether or not you qualify for non-earner benefits:
- Pre-accident life vs. post-accident life – how the accident impacted your ability to continue living a normal life and engage in activities like sports, playing instruments, overall mobility, etc.
- As the claimant, the burden of proof is on you to establish how significantly your post-accident life was impacted by your injuries.
- Pre and post-accident performance quality will also be evaluated.
- Level of pain associated with your injury and how it’s impacted your quality of life and ability to perform certain activities/tasks.
- Pre-existing medical or physical conditions may be taken into consideration when determining your benefits and the impact of the injuries on your post-accident life, but they won’t automatically prevent you from receiving payments altogether
It is not easy for a claimant to prove that, as a result of an accident, they have sustained an impairment that continuously prevents them from engaging in substantially all of the activities in which they ordinarily engaged in before the accident. However, having a full appreciation of the claimant’s pre-accident and post-accident activities as well as the significance of these activities on their life and the degree to which they are able to engage in them post-accident is an essential part of the analysis.
Keep in mind that non-earner benefits are still considered a form of income. If you apply for other income support programs such as the Ontario Disability Support Program (OSDP), your entitlement and compensation could be denied or significantly diminished. Any additional assets (i.e. a house or a car) you choose to purchase with your non-earner benefits compensation, however, won’t reduce the amount of financial support you receive from your insurance provider or a disability support program. Nonetheless, purchasing non-exempt assets like a second home or secondary vehicle will reduce the amount of compensation you receive from other sources.
What Are Income Replacement Benefits?
Oftentimes, car accident injury victims are forced to take time off work to recover, resulting in a substantial loss of income as well as emotional and physical damages, regardless of who is at fault for the accident. The IRB is intended to compensate accident victims for their loss of income from employment or self-employment, so long as the accident victim meets the necessary requirements.
If you’re unable to work for a period of time, or permanently, as a result of a car accident injury, then you may be eligible to take advantage of the IRB. These benefits provide financial support to supplement the loss of income and aid families in their time of need.
In general, IRB will be equal to 70% of your gross weekly income before the accident provided you were employed and not self-employed. Gross weekly income is determined by dividing one of the following amounts by 52:
- Your gross income for the 52 weeks before the accident; or
- 13 multiplied by your gross income for the four weeks before the accident.
However, IRB is limited to a maximum of $400 per week (or a higher amount if you purchased an optional add-on for your automobile insurance policy). In addition, your benefits will be reduced based on any collateral benefits you receive, such as disability benefits under the Canada Pension Plan or a private disability insurance policy.
How to Qualify For Income Replacement Benefits
In order to qualify for IRB in Ontario, you must meet at least one or more of the following criteria:
The insured person,
- i. was employed at the time of the accident and, as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of that employment, or
- ii. was not employed at the time of the accident but,
- was employed for at least 26 weeks during the 52 weeks before the accident or was receiving benefits under the Employment Insurance Act (Canada) at the time of the accident,
- was at least 16 years old or was excused from attending school under the Education Act at the time of the accident, and
- as a result of and within 104 weeks after the accident, suffers a substantial inability to perform the essential tasks of the employment in which the insured person spent the most time during the 52 weeks before the accident.
It is important to note that IRB does not cover the income lost for the first seven days of your disability, or after the first 104 weeks of disability, unless, as a result of the accident, the insured person is suffering a complete inability to engage in any employment or self-employment for which he or she is reasonably suited by education, training or experience.
Following the 104-week period, you might be entitled to continue receiving a minimum amount of $185 per week as long as you still meet the minimum disability requirements.
As set out above, to qualify for an IRB after 104 weeks, an insured must satisfy two conditions. First, there must be “suitable employment”. Second, the insured must suffer a “complete inability” to engage in this suitable employment.
Regarding the definition of suitable employment, Horne v. CIBC Insurance provides a helpful list of factors to consider:
- What constitutes suitable employment is fact-specific. “The work must be suitable for that [insured], viewed fairly and realistically in the context of his or her educational and employment background.”
- “If the job is substantially different in nature, status, or remuneration it may not be an appropriate alternative.”
- The insured’s age, “qualifications and technical training and know-how are relevant”
- “The primary focus is on an applicant’s functional limitations; however, job-market considerations are relevant in determining suitable employment.” For example, this may include geographic and economic considerations.
The question is whether, as rephrased by the Ontario Court of Appeal in Burtch, the insured is capable of finding suitable employment (as defined above) with a non-substantial degree of retraining. Therefore the insured will meet this disability test if they require substantial retraining in order to secure “suitable employment”.
It’s important to note that if you have multiple sources of tax-deductible income, your IBR will reflect this accordingly and could be lower than you initially expected. Financial aid provided by another insurance policy or even your work insurance could impact the amount you receive from your income replacement benefits.
Applying for Non-Earner Benefits or Income Replacement Benefits
Under the SABS a person who intends to apply for benefits described in this Regulation must notify the insurer of his or her intention no later than the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day. The insurance company will then send the insured all of the appropriate application forms, a written explanation of the benefits available, information to assist the person in applying for benefits, and information on the election relating to income replacement and non-earner benefits.
You as the insured will then be obligated to submit a complete and signed application for benefits to the insurer within 30 days after receiving the application forms.