Is a Person Unable to Work Due to Injuries Caused By An Automobile Accident Protected For the Lost Income?
The Income Replacement Benefit Provides Limited Compensation to Victims Unable to Work Because of Injuries Sustained In An Automobile Accident.
Understanding the Eligibility Criteria and Coverage Period and Limits Applicable to Income Replacement Benefit Coverage
In Ontario, victims of an automobile accident who suffer lost wages or reduced earnings may bring claims for the income replacement benefit which is a component of the Statutory Accident Benefits Schedule, O. Reg. 34/10, that is a mandatorily prescribed coverage within an automobile policy. The income replacement benefit provides lost wages or reduced earnings protection to employed persons as well as self-employed persons subject to the prescribed coverage which is limited in both the duration of time as well as limited in the sum payable. Generally, where the eligibility criteria is met, accident injury victims are entitled to compensation of seventy (70%) percent of gross income.
An income replacement benefit is prescribed within the Statutory Accident Benefits Schedule as a mandatory automobile insurance coverage and, subject to eligibility criteria, provides compensation for a limited time as wherein the Statutory Accident Benefits Schedule states:
5. (1) The insurer shall pay an income replacement benefit to an insured person who sustains an impairment as a result of an accident if the insured person satisfies one or both of the following conditions:
1. 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,
A. 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,
B. was at least 16 years old or was excused from attending school under the Education Act at the time of the accident, and
C. 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.
2. The insured person,
i. was a self-employed person at the time of the accident, and
ii. suffers, as a result of and within 104 weeks after the accident, a substantial inability to perform the essential tasks of his or her self-employment.
(2) Despite subsection (1), an insured person is not eligible to receive income replacement benefits if he or she is eligible to receive and has elected under section 35 to receive either a non-earner benefit or a caregiver benefit under this Part.
Period of benefit
6. (1) Subject to subsection (2), an income replacement benefit is payable for the period in which the insured person suffers a substantial inability to perform the essential tasks of his or her employment or self-employment.
(2) The insurer is not required to pay an income replacement benefit,
(a) for the first week of the disability; or
(b) 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.
Interestingly, as shown in section 6 of the Statutory Accident Benefits Schedule, the income replacement benefit initially provides protection to accident victims who are substantially unable to work; however, after one hundred four (104) weeks, the protection ceases unless the accident victim is completely unable to work in any occupation for which the accident victim is "reasonably suited by education, training or experience".
The difference in income replacement benefit qualifying criteria for injuries that persist beyond one hundred four (104) weeks, commonly referred to as Post 104 IRBs, is significant and often becomes a point of contention between the injury victim and the insurance company. For example, in the case of K.K. v Aviva General Insurance, 2020 CanLII 87927, a dispute regarding Post 104 IRBs arose with the injury victim taking the position that psychological impairment and ongoing pain resulted in a sufficient inability to perform any occupation for which the victim was "reasonably suited by education, training or experience". In agreeing, and ruling in favour of the victim, the License Appeal Tribunal stated:
 Due to the psychological impairments including his ongoing pain issues, I am satisfied on the balance of probabilities that the applicant is suffering a complete inability to engage in any employment or self-employment for which he is reasonably suited by education, training or experience.
 The first Multi-disciplinary report provides uncontroverted evidence that the applicant suffered psychological impairments in the accident. Aviva’s psychologist Dr. Schmidt diagnosed the applicant with an Adjustment Disorder Mixed Anxiety and Depressed Mood; and an Unspecified Depressive Disorder in December 2016. Even Dr. Simon, the orthopaedic surgeon, recognized the applicant was suffering from psychological distress as his encounter was dominated by pain-focused and self-limiting behaviour. In May 2017, the applicant’s psychologist, Dr. MacLeod, diagnosed him with “Major Depressive Disorder, single episode, severe with anxious distress; Rule out somatic symptom disorder; Rule out posttraumatic stress disorder”.
 Dr. MacLeod was of the opinion at that time that the applicant’s prognosis from a psychological perspective was guarded.
 More than 104 weeks after the accident, the applicant underwent the following assessments that confirm he was still suffering from psychological impairments and headaches and the seriousness of his psychological impairment.
 The June 2018 Psychiatric Assessment of Dr. Sivasubramanian diagnosed major depressive disorder, general anxiety disorder with panic attacks and specific phobia (driver and passenger anxiety). This report was done following the second accident in October 2017. Dr. Sivasubramanian found that the applicant was significantly impaired with respect to psychiatric signs and symptoms as a result of the March 24, 2016 accident. He found the applicant to be significantly impaired.
 The March 2019 Psychology Assessment of Dr. Corbin found the applicant was suffering from post-traumatic stress disorder as a direct result of the accident. He provided that opinion that the applicant had not yet met maximum medical improvement. In Dr. Corbin’s opinion, the applicant suffers from a serious disorder that may seriously impair his judgement, insight, behaviour, communication and social functioning. On Dr. Corbin’s recommendation, Aviva approved a treatment plan for psychotherapy dated March 3, 2019.
 While Dr. Fox’s June 21, 2018 Physiatry assessment failed to reveal substantial evidence of an objective ongoing physical impairment, Dr. Fox suspected that there were non-organic factors at play and that there were perhaps non-physical factors contributing to his presentation during the assessment. Dr. Fox recommended the applicant be referred to a multi-disciplinary pain clinic.
 The assessment of occupational therapist Valerie Wilson further persuades me on the balance of probabilities that the applicant remained unable to work 104 weeks after the accident and ongoing. In her March 30, 2019 assessment report Ms. Wilson states: “…he presents with a complex mental health impairment which has limited his ability to return to his pre-collision meaningful daily activities.”
 She finds the applicant to have impairments in day-to-day functioning and that he requires both equipment and services of an interdisciplinary rehabilitation team.
 It is clear from the assessment of Ms. Wilson that the applicant leads a sedentary life as a result of the accident and is often not motivated to shower or to get dressed. Ms. Wilson also mentions the medications prescribed to the applicant (including mood medications) and recommended that his medication management needed review to ensure that he is using his medication to maximize its effectiveness. She recommended an intensive reactivation program as well as assistance with bathing.
 Aviva does not refute the psychological impairments that the applicant has suffered in the accident and offers no evidence with respect to appropriate employment or self-employment for a person with the applicant’s impairments.
 On the basis of the evidence of the applicant’s ongoing psychological impairments and the evidence that he requires daily medications for his headaches and moods, I am satisfied on the balance of probabilities that the applicant suffers from a complete inability to engage in any employment or self-employment for which he is reasonably suited by education, training or experience. There is no evidence to show what employment or self-employment this 53-year old gentleman has the ability to do given his psychological impairments and the fact that he has not worked for over four years since the accident.
In Ontario, the Insurance Act prescribes a package of benefits, known as the Statutory Accident Benefits Schedule, that contains, among other things, limited coverage to provide compensation for lost or reduced income earnings due to to injuries suffered by an accident victim.