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Income Replacement Benefits: What you need to know

If you are hurt or injured in a car accident in Ontario, you will be entitled to an array of accident benefits.

These accident benefits are paid by your own car insurer, regardless of fault. If you did not have car insurance at the time of the car accident, the order of who pays for those accident benefits is determined based on a set of priority rules as defined under the Insurance Act and the Statutory Accident Benefits Schedule (“SABS”). This is often why you see insurance companies fighting not against a Plaintiff, but against each other in an attempt to “pass the buck” so to say to determine who is responsible for paying an injured accident victim’s accident benefits. Because the truth is insurance companies would rather not pay if they don’t have to. Can you blame them?

Speaking of passing the buck, one of the benefits which an injured accident victim may be eligible for is called the income replacement benefit or IRB.

The income replacement benefit is only available to income earners. If you were not earning an income at the time of the accident, or not employed but either worked 26 off the 52 weeks for the accident, you will not be entitled to the income replacement benefit. Self employed people are considered employed and working. But, recovering the income replacement benefit for self employed plaintiff’s can be very difficult. Establishing an income in a cash business, or in a business with limited record keeping makes it hard for insurers and their accountants to verify that you were working and entitled to the income replacement benefit. If they can establish that you are entitled to the income replacement benefit, quantifying that benefit can be very tricky. The reality is that self employed people often don’t show or report the entirety of their income because they don’t want to pay as much in tax. The problem with that is that you can only recover what you report to Revenue Canada. Your income replacement benefit is based on reportable income. The income replacement benefit is NOT based on unreported income, or moneys which are kept off the books. You can’t have it both ways.

The term income replacement benefit is very misleading.

You would think that the income replacement benefit would “replace” your income. It does a very poor job at the replacement part of your income.

A true income replacement benefit should make you whole again, and replace the lost income while you are hurt or injured from a serious car accident and unable to work.

The way that the income replacement benefit works in Ontario is that it only replaces 80% of your NET pre-accident weekly income, to a maximum of $400/week.

To be fair, the weekly income replacement benefit can be increased to $800/week (or more) if you are one of the few Ontarians who actually purchased optional insurance to boost the income replacement benefit. Stats show that only a minority of Ontario drivers purchase optional benefits to boost the income replacement benefit. The standard benefit remains at $400/week. That standard income replacement benefit has NOT increased to match the rising cost of inflation which is a sad state of affairs.linkedin-2-300x300

So, the majority of Ontarians are capped at $400/week for the income replacement benefit at the very most if they did not opt to purchase additional coverage under their respective car insurance policies. If you didn’t have car insurance at the time of your accident and were your struck by a car as a pedestrian, cyclist or were a passenger in someone else’s vehicle, you’re stuck with the $400/week income replacement benefit maximum limits.

But just because you’ve been involved in a serious car accident doesn’t mean that you’re automatically entitled to the income replacement benefit. You must qualify for the income replacement benefit by demonstrating to the insurance company that your injuries meet the medico-legal definition for the entitlement; which is as follows:

Over the first 104 weeks (two years), entitlement to the IRB is defined by Section 5 of the SABS as:

a substantial inability to perform the essential tasks of one’s own employment

After two years have elapsed (post 104 week period), entitlement to the income replacement benefit is defined as:

a complete inability to engage in any employment, for which her or she is reasonably suited by education, training or experience.

Entitlement is predicated upon impairment being suffered. Impairment is defined in s. 2 of the Regulation: “a loss or abnormality of a psychological, physiological or anatomical structure or function”. Elsewhere in the legislation, particularly in the definition of catastrophic impairment, an additional criterion is available – that of “behavioural disorder”. This is a form of behavioural or psychological abnormality.

In terms of assessing entitlement, the insurance company gets to act as Judge, Jury and Executioner to determine whether or not they deem that you qualify for the income replacement benefit. The insurer has the resources and power to send you to a host of doctors to assess your ability to work, injuries and whether or not you qualify for the income replacement benefit.

If the insurance company isn’t paying your income replacement benefit, then what are you going to do for money if you cannot return to work; pay rent; pay your mortgage and pay your bills. No doubt this will cause significant  stress and financial hardship. It’s not fair and it’s not right that the insurance company is not helping you in your time of need. It’s certainly in their best interests to deny your claim for income replacement benefits. The more money which they pay out to you, the less money they get to keep and report in profits. It’s in the insurance company’s own financial self interest to deny these claims and make your life more difficult.

If you have been denied an income replacement benefit, the lawyers at Goldfinger Injury Lawyers can assist with your claim against the insurance company. We have the experience, commitment and know how to get you the compensation and benefits which you deserve. Call us at 1-877-730-1777 or reach out by email at to set up a free, no obligation consultation to see if you have a case.


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