Vice Chair Ian Maedel determined the quantum of post-age 65 IRB entitlement in his initial decision, and this was taken issue with on reconsideration. Economical argued that the issue of entitlement and post-65 quantum was never an issue in dispute before the Tribunal and no submissions were made by either party on same. 

The dispute in the decision below was as follows: It was a dispute over the quantum of Income Replacement Benefits (“IRBs”). Initially, Economical paid out $400.00 a week based on the OCF-2. However, the Applicant had been receiving Short Term Disability (“STD”) and Long Term Disability (“LTD”) Benefits collateral benefits for a period of time after the accident. She also qualified for Canada Pension Plan – Disability (“CPP-D”). Vice Chair Ian Maedel noted that all these benefits were taxable and offset the standard weekly IRB payment, as per ss.4(1)(a) and (b) of the Statutory Accident Benefits Schedule (the “SABS”).

The issue was ultimately a dispute as to whether s.4 of the SABS calls for a gross deduction of other income replacement assistance – which includes STD, LTD, and CPP – or a net deduction from the quantum of IRBs (i.e., not the after-tax amounts). The former would result in lower IRB quantums.

Vice Chair Maedel ruled that the quantum of an IRB is based on gross income deductions and payments and not net. However, Vice Chair Maedel then moves into an analysis of how collateral benefits are to be applied when calculating the quantum of IRBs post-age 65, so that he could determine their quantum in the case before him. The amount of post-65 IRBs is calculated by determining the quantum “the day of the person’s 65th birthday” and inserting that amount into the formula located at s.8(1) of the SABS. CPP-D and LTD benefits only last until an individual reaches 65, terminating when they reach same, so the question was whether or not those deductions would be in play.

In his view, here the amount to be used in the calculation should revert back to the original $400.00 a week and essentially not include the CPP-D and LTD deductions. If they did include them, then it would result in a situation where the collateral benefits received amounted to more than 70% of her gross weekly pre-accident income and the amount of IRB post-65 would be zero. To allow an interpretation of the SABS that would result in a situation such as this, in Vice Chair Maedel’s view, was contrary to the consumer protection mandate of the SABS.

On reconsideration, Vice Chair Maedel found that Economical was correct – the issue of entitlement and quantum to post-65 IRBs was never at issue before the Tribunal. Thus, his ruling on same was an error of fact and law. Portions of his decision with respect to entitlement to IRB and to the quantum of post-65 IRBs were therefore struck.

The takeaway is that, as it stands, there is no authority from the LAT as to whether collateral benefits ending upon the Applicant attaining the age of 65 should be deducted. However, a loss transfer arbitrator seems to have adopted the same approach that Vice Chair Ian Maedel did when deciding on the figure to use in the post-65 calculations and whether collateral benefits should be deducted, see: In all likelihood, Vice Chair Ian Maedel’s approach was the correct one, but until the Tribunal rules definitively on this issue an argument could still be made that said deductions should still apply to reduce post-65 IRB quantum.

Branson Wong is an associate and author of this blog. If you have any questions regarding this decision or a similar file, please contact Branson at [email protected] or 416-777-7387.