Why are Notices of Assessment Necessary to Quantify IRBs?

Claimants and legal representatives often ask us why we require Notices of Assessment (NOAs) when quantifying income replacement benefits (IRBs)?

The answer to this question is that, in accordance with Section 4(5) of the Statutory Accident Benefits Schedule (SABS), NOAs verify that a claimant has reported the income indicated on their tax returns to Canada Revenue Agency.

Section 4(5) of the SABS states, “If, under the Income Tax Act (Canada) or legislation of another jurisdiction that imposes a tax calculated by reference to income, a person is required to report the amount of his or her income, the person’s income before an accident shall be determined for the purposes of this Part without reference to any income the person has failed to report contrary to that Act or legislation.”

The recent Tara Gamble and Allstate Insurance Company of Canada (20-010512/AABS) decision specifically answers this question as well.

In this decision, the self-employed Applicant was involved in a motor vehicle accident on June 29, 2015 and, as a result, sought entitlement to IRBs.

In order to quantify the Applicant’s IRBs, the Respondent requested numerous times, however, was not provided with T4 Statements and NOAs from 2017 to 2019 from the Applicant.  As a result, the Respondent suspended the Applicant’s IRBs.

The Applicant provided tax returns and was of the opinion that this information should be sufficient to quantify IRBs.

The Adjudicator agreed with the Respondent suspending the Applicant’s IRBs stating, “In terms of the respondent having copies of the applicant’s tax returns versus her NOAs, though tax returns provide useful information for the respondent when assessing the applicant’s entitlement to an IRB, unlike an NOA, a tax return does not provide the veracity of the submission’s information.  An NOA however, confirms that the Canada Revenue Agency has accepted or rejected the applicant’s tax and revenue information as fact.”

“Without this information, the respondent may not be able to properly calculate the applicant’s IRB quantum, in light of other sources of revenue or benefits.”

Read the decision in full detail here: Tara Gamble and Allstate Insurance Company of Canada (20-010512/AABS)