LAT rules on Section 8(1) for IRB Purposes

In the LAT decision released on January 13, 2020, T.A.K. v Aviva General Insurance Company (18-008232/AABS), the Adjudicator provides interpretation for the Section 8(1) adjustment in the SABS.

The Applicant was injured in a motor vehicle accident on December 10, 2016. Prior to the accident, both parties agreed the Applicant was employed earning $19,847.96 during the 52 weeks before the accident and that 70% of the weekly base amount is $267.18 before any deduction for income replacement assistance.  However, both parties could not agree on the amount of CPP disability benefits to be deducted when calculating the IRB, and as such, no IRBs were paid to the Applicant.

After resolving the issues regarding the IRBs payable for December 17, 2016 to December 16, 2018, the Adjudicator ruled on the Applicant’s interpretation of Section 8(1) of the SABS.  This section considers an Applicant who was receiving an IRB immediately before his or her 65^th birthday and outlines the formula to be used when adjusting a weekly IRB on the later of reaching the age of 65 or the second anniversary of when an Applicant becomes entitled to IRBs.

In this decision, that Applicant submitted that the age 65 adjustment does not apply [i.e.  Section 8(1)] to them as they were not receiving an IRB immediately before their 65^th birthday.

The Adjudicator and Respondent agreed on interpreting “receiving an IRB” means “entitled to receive an IRB”.  The Respondent relied on the FSCO decision Hamilton and Dominion of Canada.  The LAT Adjudicator agreed with the interpretation in the FSCO decision, which meant the Section 8(1) adjustment would apply.

The interpretation of the ruling confirms that “c” of the Section 8(1) formula is the weekly IRB that the claimant was entitled to receive (or was receiving as noted above) immediately before the adjustment.  This means that the claimant’s weekly IRB that is being received is adjusted (i.e. after deductions for CPP disability benefits, LTD benefits, etc.), not solely 70% of their gross weekly pre-accident income earned.

In the Applicant’s case, the later date was the second anniversary the Applicant became entitled to receive an IRB, however, by the time the Applicant reached the second anniversary, his CPP disability benefits had ceased.

Read the decision in full detail here: