Insurer Entitled to Deduct LTD Benefits Despite Claimant Failing to Apply

In the recent Licence Appeal Tribunal decision, McBeth v. Allstate Canada (20-007407/AABS), the adjudicator determined that the Respondent is entitled to deduct long-term disability (“LTD”) benefits from the Applicant’s income replacement benefits (“IRBs”) despite the Applicant failing to apply for LTD benefits.

Specifically, the Applicant was injured in an automobile accident on November 24, 2018 and had LTD benefits available after a waiting period of 4 months which covered 66.67% of his monthly earnings.  In order to receive LTD benefits, the Applicant needed to submit a claim no later than 90 days after the end of the waiting period (i.e. by June 24, 2019).

Section 7(1) of the Statutory Accident Benefits Schedule (“SABS”) states that weekly IRBs payable shall be reduced by “the total of all other income replacement assistance, if any, for the particular week the benefit is payable.”  Other income replacement assistance is “the amount of any gross weekly payment for loss of income that is received by or available to the person as a result of the accident under the laws of any jurisdiction or under any income continuation benefit plan.”

The Respondent sent email correspondence to the Applicant on April 12, 2019 to seek an update on the status of his LTD application.  The Applicant claims to have attempted to retrieve the LTD application form through the provider’s website but was only able to access it on May 2, 2019.

In addition, the Applicant was not able to obtain the funds to pay his doctor to complete the required LTD documents until June 7, 2019.  Similarly, the Applicant was unable to pick up the completed LTD forms from his doctor’s office until September 5, 2019 and due to financial constraints he could not send the forms to the LTD provider until September 25, 2019.

On November 7, 2019 the Applicant’s LTD provider advised his claim was denied as a result of filing the claim late.  Given this, the Applicant argued that his LTD benefits were denied and, therefore, they should not be deducted from his IRBs payable as they are not available to him.

The Respondent countered that the Applicant should be considered to have not applied for LTD benefits as he was late filing his claim and, as such, LTD benefits should be deducted from his IRBs payable, consistent with similar cases that dealt with CPP disability benefits being available to claimants but not applied for.

Specifically, “… the applicant has an obligation, where collateral benefits are available, to apply for those benefits within the parameters of the collateral benefits policy.”

The adjudicator agreed with the Respondent concluding, “…the obligation is not on the respondent insurer to advise the applicant of the collateral benefit policy obligations and timelines to apply for the benefit, especially when the applicant is represented by counsel.  The applicant must be diligent in pursuing a claim under a collateral benefits LTD policy.  If the applicant fails to apply for collateral benefits, or if the applicant misses the limitation period within which to apply for the collateral benefit, in my view, that is akin to failing to apply for the benefit at all as required by the Schedule and the respondent insurer is entitled to deduct the LTD as if the applicant is receiving the benefit.”

Read the decision in full detail here: McBeth v. Allstate Canada (20-007407/AABS)