Loss of Income Benefits
If you have suffered injuries due to the accident and are unable to perform the essential duties of your occupation, you will qualify for weekly indemnity income payments. These payments are available in New Brunswick, Nova Scotia and PEI and cover 80% of your weekly income, up to a maximum of $250.00 per week.
Who is covered by Section B Loss of Income Benefits?
In order to qualify for weekly loss of income benefits, you must meet certain criteria:
- You were employed at the time of the accident or had arranged to start a new job, or had been employed for any six months out of the previous twelve months.
- Your injuries kept you from working for 7 days out of the 30 days following the accident.
- You have returned to work but are earning less money due to your injuries.
Under the contract of insurance, the insured is entitled to weekly indemnity benefits when he or she suffered a disabling injury. The inability to perform the essential duties of work must manifest itself within 30 days of the accident and prevent work for at least 7 days, otherwise the injured party has no claim: Brideau v. Dominion of Canada General Insurance Co., 1993 CanLII 3302 para 4 (QB); Barrett v. Cigna Insurance Co. of Canada, 2000 CanLII 3660 paras 57-67 (QB).
Are Part-time or Seasonal Workers Entitled to Section B Loss of Income Benefits?
It is not necessary that the insured work full-time: Savoie v. Wawanesa Mutual Insurance Co., 2008 NBQB 72 para 57. Being engaged to start work on a defined date is also sufficient, even if off work at the date of the accident: Vautour v. Sun Alliance Insurance Co. (1985), 61 NBR (2d) 294 (QB). Part-time, seasonal and irregular work meet the requirements as long as there is a 6-month employer-employee relationship: McCormick v. Sovereign General Insurance Co. (1982), 36 NBR (2d) 466 (QB); Fougère v. Wawanesa Insurance Co., 2002 NBQB 364 paras 18-20; Savoie, supra paras 49-55 & 58-63. There must be some tangible evidence of work in order to qualify: Cormier v. Coachman Insurance Co., 2001 NBQB 145 paras 20, 23-24 & 27.
Are Employees on Unemployment Insurance entitled to Section B Loss of Income Benefits?
Being on unemployment insurance at the time of the accident does not disqualify the insured if the inability to work is medically attested within the time period: Fougere, supra paras 12-16. The policy further provides that the insured party who receives benefits for a period before returning to work, remains entitled if again forced off work within 30 days of resuming work; the insured bears the burden of showing an inability to perform the essential duties of the job: Shaw v. Wawanesa Mutual Insurance Co., 2001 NBQB 17.
Are Unpaid Homemakers covered by Section B Loss of Income Benefits?
The live-in unpaid housekeeper, not otherwise working outside of the household, is entitled to $100 for a maximum of 52 weeks, while “completely incapacitated and unable to perform any of his or her household duties”. Hence, it would appear that a live-in unpaid housekeeper who becomes a quadriplegic in a car accident is entitled, at the most, to a year of weekly indemnity benefits. The rationale for the provision is difficult to decipher. As no-fault benefits, it may be the sole avenue to people injured from their own negligence; it is not like the slack can always be picked up by the tortfeasor.
What Period of Time Income Benefits Are Payable?
An injured person is entitled to loss of income payments for a period of 104 weeks if he or she suffers substantial inability to perform the essential duties of his/her occupation or employment.
Disability From “Own occupation” to “Any Occupation”
After the expiration of 104 weeks, the insured is only entitled to further payments if “it has been established that such injury continuously prevents such person from engaging in any occupation or employment for which he is reasonably suited by education, training or experience”.
Burden of Proof for “Any occupation”
The burden is on the insured to demonstrate his or her continuing disability past the 104 weeks: Noël v. Royal and Sunalliance Insurance Co. of Canada, 2005 NBQB 453 paras 60-63; Hayston v. Wawanesa Mutual Insurance Co. of Canada, 2011 NBQB 381 paras 5-7, However, the alternative employment must be “reasonably comparable to the former occupation in status and rewards and reasonably suited in work activity in light of the insured’s education, training and education”: Smith v. GAN Insurance Co. Ltd, 2004 NBCA 39 para 6; Hayston, supra para 98. The period of coverage is indefinite, i.e. “for the duration of such inability to perform the essential duties”, which can extend beyond an insured’s “anticipated retirement and, indeed, for his or her lifetime”: Veno, supra para 13.
What Is Amount of Section B Loss of Income Benefits?
The benefits are based on the gross weekly income of the insured at the time of the accident:
Amount of Weekly Payment
- The amount of a weekly payment shall be, eighty (80) percent of the insured person’s gross weekly income from employment, less any payments for loss of income from employment received by or available to such person under,
- the laws of any jurisdiction, other than payments available under any workers’ compensation law or plan;
- wage or salary continuation plans available to the person by reason of his or her employment,
but no deduction shall be made for any increase in such payment due to a cost of living adjustment subsequent to the insured person’s substantial inability to perform the essential duties of his or her occupation of employment.
- The maximum amount payable is $250 per week in respect of any insured person.
Thus, the insured is entitled to the lesser of $250 or 80% of the pre-accident gross weekly income. How the amount is calculated was addressed in Thompson v. Allstate Insurance Co. of Canada, 2005 NBQB 246. Instead of using the earnings at the same time of the accident, the insurer tried using an average of earnings over the last seven weeks before the accident. The insured’s rate of pay had increased during that time. The application judge relied on the rate of pay at the time of the accident multiplied by the number of hours per week and ordered weekly indemnity benefits of 80% of the amount. He rejected the insurer’s approach of average gross weekly earnings.
Deductions from Section B Loss of Income Benefits
Like most insurance schemes, the New Brunswick standard automobile insurance policy provides for deduction when the insured receives similar benefits from other sources. When determining entitlement, those have to be taken into account. The deductions evidently play a role in the way that the amounts are calculated and the value of benefits to be paid. Some judgments addressed whether collateral benefits are deductible at all. Also, at one time, courts had to decide whether collateral benefits received should be deducted from the gross weekly income of the insured (the 80% rule), or from the capped amount of benefits payable by the insurer. Judges then held the collateral benefits to be deductible from the benefits payable by the insurer: see Parry v. Kansa General Insurance Co. (unreported, Justice Hoyt – unemployment insurance benefits); Landry v. Commercial Union Assurance of Canada (1984), 57 NBR (2d) 181 (QB – disability insurance benefits), confirmed at (1985), 63 NBR (2d) 331 (CA). The terms of the contract causing the ambiguity was clarified as of January 1, 1984. The language of the provision now provides that the deduction is against the gross weekly income. Click here for a more comprehensive report of Deductibility.