Income Replacement Benefits

Car and other motor vehicle accidents can leave injured victims unable to work, leading to reduced income and sudden financial stress. Ontario’s Statutory Accident Benefits Schedule (SABS) provides Income Replacement Benefits (IRBs) to replace part of an injured person’s lost income while they’re unable to work. IRBs can be essential for injured individuals seeking to pay their bills and support their dependents while they recover.

Unfortunately, sometimes claiming Income Replacement Benefits through the SABS can be challenging. If your insurer delays, denies, or reduces your IRB claim, our legal team at Preszler Injury Lawyers can help protect your rights. Contact us today to discuss your legal options for free.

What Are Income Replacement Benefits and Who Qualifies?

Income Replacement Benefits are weekly payments available through your auto insurance that replace lost income while you are substantially unable to perform the essential tasks of your job after an accident.

To qualify for IRBs, you must typically:

• Be employed or self-employed at the time of your accident.
• Have worked at least 26 of the 52 weeks prior to your accident, and/or received Employment Insurance (if you were unemployed at the time of the accident).

IRBs are not available to minors under the age of 18 (although other Accident Benefits may apply). For seniors who are over the age of 65, benefits may be adjusted or tapered to an amount based on applicable pensions.

To determine whether you qualify for Income Replacement Benefits, insurance adjusters will typically use the “substantial inability” test to assess your situation. To meet the standards of this test, you generally have to:

• Identify the essential tasks of the job you had before your accident.
• Show that the injuries you sustained in your accident prevent you from performing these tasks.

Certain individuals may have to undergo additional steps to obtain IRBs. Self-employed individuals will have their income replacement amount calculated after deducting business expenses from their income. In addition, students or recent graduates who are not yet working may still be eligible for IRBs or Non-Earner Benefits, depending on their circumstances. If you have questions about your eligibility for Income Replacement Benefits, it is recommended that you speak with an experienced Accident Benefits lawyer as soon as possible.

How Are Income Replacement Benefits Calculated and Paid?

When insurance adjusters are paying out IRBs, they generally use a standard formula to calculate the amount you are owed. You may receive up to 70% of your gross pre-accident income, capped at $400/week. While these basic Accident Benefits are available to all drivers through their mandatory no-fault insurance policy, you may also purchase additional, optional benefits. If you choose to do so and pay more for your premium, your IRB limit may be higher (e.g., up to $1,000/week).

The amount of time you receive benefits for will depend on your ability to be gainfully employed after the accident:

• First 104 Weeks: IRBs will be payable for the first 104 weeks after your accident if you cannot perform the essential tasks of your pre-accident job.
• After 104 Weeks: IRBs will only continue to be paid out if you cannot engage in any employment reasonably suited to your education, training, or experience. This is referred to as the “complete inability test” and is commonly utilized by insurance adjusters.
• After You Turn 65: Your benefits will continue, but may be reduced based on a predetermined formula set out under the SABS.

Your IRBs may also be reduced if you receive employment income after your accident or other disability benefits (like CPP Disability, short-term disability, long-term disability insurance, or Employment Insurance).

It should be noted that Income Replacement Benefits are not taxable under the Income Tax Act. As a result, they will not qualify as taxable income when you file your tax return.

How to Apply for Income Replacement Benefits in Ontario

There are several steps you must take to apply for and receive IRBs after a motor vehicle accident in Ontario. Generally, you must:

• Step 1: Notify your insurer within 7 days of the accident occurring.
• Step 2: Submit appropriate OCF forms to apply for IRBs. Typically, you will need to fill out and submit the OCF-1, which is the Application for Accident Benefits, and the OCF-3, your Disability Certificate (completed by your healthcare provider). You may need to submit additional forms, which your lawyer can advise you on.
• Step 3: You’ll need to collect supporting documentation to demonstrate the extent of your injuries and their effect on your ability to work. This may include medical reports, employment records, proof of historical income, and more.
• Step 4: Stay aware of important deadlines for submitting important paperwork. Most Accident Benefits applications must be submitted within 30 days of receiving the forms from your insurer. If you exceed this time limit, it may result in a delay or denial of your benefits.

An experienced Income Replacement Benefits lawyer can help avoid incomplete applications and missed deadlines. They’ll guide you through the process at every stage so that you can focus on your health and recovery after an accident.

Contact Preszler Injury Lawyers Today if You Have Questions About Income Replacement Benefits in Ontario

Although Statutory Accident Benefits are available to all individuals involved in motor vehicle accidents in Ontario, regardless of fault, it is common for applicants to face delays and denials. When insurers dispute the severity of your injuries, question your ability to work, or deem your application incomplete, an experienced Accident Benefits lawyer can help.

At Preszler Injury Lawyers, our legal team regularly helps accident victims request appeals from their insurer, escalate disputes through the Licence Appeal Tribunal (LAT), and use our legal experience to prepare evidence and litigate their claims. When you work with our lawyers, we’ll make sure your applications are complete, gather documentation on your behalf, negotiate directly with insurers on your behalf, and more.

To discuss your situation with a lawyer at Preszler Injury Lawyers, schedule your free initial consultation today. You can call our office at 1-888-608-2111 or fill out our online contact form now.