Income Replacement and Non-Earner Statutory Accident Benefits

Posted on April 3, 2017

In last week’s blog we addressed specific automobile insurance benefits that can help an injured insured person pay expenses related to his or her physical and emotional recovery after an automobile accident.

Those benefits medical, rehabilitation, and attendant care fall under the large umbrella of Statutory Accident Benefits (“SABs”).A person injured in an automobile accident is entitled to request SABs from their own automobile insurance company no matter who was at fault for the accident. Because the issue of “fault” is really a “non-issue”, SABs are often referred to as “no-fault benefits”.  If you do not have your own automobile insurer, you might be able to claim SABs from other sources.  Call us to help you determine from whom you should be able to collect these benefits.

This week’s blog focuses on two more types of SABs: income replacement benefits (“IRB”) and non-earner benefits (“NEB”). These are weekly benefits that an insurance company can pay to an injured insured person who, because of an accident, is unable to work or unable to carry on a normal life.

Income Replacement Benefits (“IRB”)

If you are unable to work because of an injury you suffered in an automobile accident you might be entitled to receive IRB from your insurance company.

Who can receive IRB and for how long?

1. To be eligible for IRB you have to meet at least one of the following criteria:You were employed at the time of the accident and, because of the accident and during the first 104 weeks after the accident, you suffer a substantial inability to perform the essential tasks of your employment; or

You were not employed at the time of the accident but:

• you were employed for at least 26 weeks during the 52 weeks before the accident or were receiving Employment Insurance benefits at the time of the accident,
   
• you were at least 16 years old at the time of the accident (or were excused from attending school under the Education Act at the time of the accident); and
   
• because of the accident and within 104 weeks after the accident you suffer a substantial inability to perform the essential tasks of the employment in which you spent the most time during the 52 weeks before the accident; or

2. You were self-employed at the time of the accident and, because of the accident and during the first 104 weeks after the accident, you suffer a substantial inability to perform the essential tasks of your employment.

If you continue to suffer a substantial inability to perform the essential tasks of your employment your insurance company should pay you IRB during the first 104 weeks after the accident.

You are not entitled to receive IRB after the first 104 weeks of your disability unless you suffer a complete inability to engage in any employment (or self-employment) that you are reasonably suited to perform by way of your education, training, or experience.

Your insurance company never pays IRB for the first week of your disability. But once the first seven days have passed you will continue to receive IRB for as long as you continue to qualify.

How much money will an insurance company pay in IRB?

Your insurance company will calculate your weekly IRB. Your lawyer will verify that the calculations were done correctly.

IRB calculations can be complex but, in general, if you are under age 65, your weekly IRB is 70% of your gross weekly employment income (less any other income replacement assistance you receive for the same week) or $400.00, whichever is less.

If you are self-employed at the time of the accident, there is a completely different calculation. You may need to speak with someone who can help you determine the exact amount of IRB to which you are entitled.

Perhaps you should speak with your broker or insurance company about purchasing “optional benefits” for IRB. An optional benefit can increase the $400.00 noted above to as much as $1,000.00. However, if 70% of your gross weekly income (less any other income replacement assistance you receive for the same week) is less than your optional benefit amount, you will still only receive 70% of your gross weekly income (less any other income replacement assistance you receive for the same week). It’s complicated. We can help.

Keep in mind that if the accident was not your fault, you may be able to advance a claim for lost income against the person that injured you.

Non-Earner Benefits (“NEB”)

If you do not qualify for IRB, you might qualify for NEB, a lesser-paying benefit.

Who can receive NEB and for how long?

To be eligible for NEB you have to meet one of the following criteria:

1. Because of the accident and within 104 weeks after the accident you suffer a complete inability to carry on a normal life and you do not qualify for IRB; or
    
2. Because of the accident and within 104 weeks after the accident you suffer a complete inability to carry on a normal life and:
    
3. you were enrolled full-time in elementary, secondary, or post-secondary school at the time of the accident; or
    
4. you completed your schooling less than one year before the accident and prior to the accident you were neither employed nor self-employed in a job that reflected your education and training.

As of June 1, 2016 your insurance company never pays NEB for the first four weeks that you suffer a complete inability to carry on a normal life. But once the first four weeks have passed, you can continue to receive NEB (if you continue to qualify) for a maximum of 104 weeks after the accident.

If you are under 18 years old when you suffer a complete inability to carry on a normal life your insurance company will not pay you NEB even if you otherwise qualify. Your insurance company will wait until you turn 18 to give you the money.

How much money will an insurance company pay in NEB?

NEB is a weekly benefit of $185.00 (less any other income replacement assistance you receive for the same week) for the duration that you suffer a complete inability to carry on a normal life, for a maximum of two years after the accident.

This article is not a substitute for legal advice. If you have any questions, please contact us at 519-946-4300.