Income Replacement Benefits and Long Term Disability 

There are numerous benefits available to victims of motor vehicle accidents in Ontario. Two of the potential benefits a victim of a motor vehicle accident may seek are Income Replacement Benefits (IRBs) and Long Term Disability Benefits.

IRBs are for individuals who are unable to work as a result of an accident and are part of Ontario’s Statutory Accident Benefits (SABs). Long term disability is another form of financial assistance provided to an individual who is unable to work due to an injury or illness. However, long term disability is typically sought through an employer.

Patricia Branden sought both of these forms of financial assistance following her motor vehicle accident, and what ensued is a great example of why documentation is so important in these types of cases.

The Case

In 2017, Patricia Branden was injured in a motor vehicle accident. She sought Income Replacement Benefits through her car insurance provider, the Co-Operators, and was granted the benefits.

At the same time, Branden sought long term disability benefits through her employer’s insurance plan, of which she was a member. However, Empire Life, her employer’s insurer, denied this claim.

The following year, in October of 2018, Branden reached a settlement with Empire Life. The settlement amount was $120,000 and included $100,000 in “aggravated, exemplary, and punitive damages.” As part of the settlement, Branden was required to sign a release for a two-year suspension on her long-term disability claim.

When The Co-Operators were informed of the settlement, they cut Branden’s IRB payments. This began a series of appeals at the LAT and then at the Ontario Divisional Court.

LAT Findings

When they cut her IRB payments from $400 per week to $209.80 per week, The Co-Operators also noted that they had overpaid her by $3,369.72 on previous payments. The Co-Operators based this position on the fact that the $120,000 lump sum awarded to Patricia by Empire represented a weekly income replacement.

Branden filed with the License Appeal Tribunal in July 2019 to fight this decision. The LAT sided with Branden, stating that she was entitled to payments of $400 per week according to the SABS. They came to this decision based on the details of the long term disability settlement.

Specifically, the settlement was “not confined to payment for her LTD claims alone.” Therefore, there were no details that would allow for the Co-Operators to deduct the settlement from the past IRB calculation.

The Co-Operators requested that the LAT reconsider their decision. The LAT refused, and the case was then brought to the Ontario Divisional Court for review.

Ontario Divisional Court Findings

The Co-Operators approached the Divisional Court with two arguments. First, it was impossible to appeal the finding that the settlement payment was not an income replacement benefit because that was a factual determination. Second, that they were entitled to the deduction under the “silos” approach for deduction of collateral benefits for tort claims.

Yet again, the Court found itself on the side of Branden. The adjudicator reiterated that there was no evidence to show that the settlement payment represented income replacement.

In terms of the “silos” approach, the adjudicator found that the $120,000 settlement payment was not confined to payment for her LTD claims alone, and again, there were not enough details to allow the Co-Operators to deduct the settlement from past payments. This was especially true considering that “the amount of any gross weekly payment for loss of income that is received by or available to the person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan” is only applied to the “particular week” that the benefit is payable.

The Takeaway

The case of Patrician Branden against The Co-Operators is an excellent example of how important documentation is in a case. Upon appeal at the LAT and in the Ontario Divisional Court, the case turned on the details of the settlements and what the lump sum payment represented.

It’s important to consider that this degree of overlap and complexity is not uncommon in personal injury cases. That’s why having an experienced lawyer on your side can make all the difference in whether or not you win your case. If you’ve been injured in a motor vehicle accident or as the result of someone else’s negligence, contact Sharma Law today.

Recent Posts