Many insurance companies think they are. Until recently, there has been no case law which dealt specifically with Employment Insurance sickness benefits received following an accident.
However, on February 16, 2021, Vice-Chair Jesse Boyce of the Licence Appeal Tribunal released his decision in Spence vs. Aviva Insurance Company of Canada. This decision is the first case to consider how Employment Insurance sickness benefits should be treated for the purposes of an income replacement benefit calculation.
Vice-Chair Boyce was asked to determine whether Employment Insurance sickness benefits are deductible as “gross employment income” from the total income replacement benefit payable to a claimant.
Vice-Chair Boyce ultimately held that Employment Insurance sickness benefits received after a motor vehicle accident are not deductible from your IRB.
Nurse injured in a Motor Vehicle Accident required to apply for Employment Insurance Sickness Benefits before applying for LTD
Spence was injured in a motor vehicle accident on March 4, 2019. At the time of the motor vehicle accident, she was employed full-time as a registered nurse. Spence was entitled to receive an Income Replacement Benefit from Aviva Insurance Company. However, due to the provisions of her group insurance plan, she was required to apply for Employment Insurance sickness benefits before she could apply for long-term disability benefits. Spence was approved to receive Employment Insurance Benefits and benefits were paid to her between June 23, 2019, and October 26, 2019.
Are EI Sickness Benefits Employment Income?
Aviva Insurance took the position that Spence’s employment insurance sickness benefit fell under the definition of “gross employment income” under section 7(3)(a) of the Statutory Accident Benefit Schedule. It was Aviva’s position that the amount received by Spence for her Employment Insurance sickness benefit was therefore deductible from the $400.00 a week that she was receiving as her income replacement benefit. As a result, Aviva reduced Spence’s income replacement benefit to $6.60 per week.
Tierney Stauffer LLP on behalf of Spence disputed Aviva Insurance’s decision on the basis that Employment Insurance sickness benefits are specifically excluded pursuant to section 4(1) and section 47(3) of the Schedule and are therefore not deductible from the total income replacement benefit payable.
The parties were unable to agree, and the matter proceeded to the Licence Appeal Tribunal for a resolution of the dispute.
Treatment of Employment Insurance Benefits inconsistent under the SABS
Vice-Chair Boyce found that there was an ambiguity in the Statutory Accident Benefit Schedule due to the inconsistent treatment of Employment Insurance benefits under sections 7(3), 4(1) and 47(3). As a result of the ambiguity the arbitrator was required to look beyond a plain reading of the wording of section 7(3) and interpret the intention of the legislature given the ambiguity.
Vice-Chair Boyce, ultimately decided in favour of our position and held that given the wording of section 47(3) of the Statutory Accident Benefit Schedule, the legislature intended for Employment Insurance sickness benefits to be treated differently from other types of Employment Insurance benefits, like maternity or regular benefits payable if an individual was laid off or terminated by their employer.
EI Sickness Benefits not Deductible from Income Replacement Benefit
Vice-Chair Boyce also rejected Aviva Insurance Companies’ argument that the mere fact that Spence’s position was being held by her employer made her Employment Insurance sickness benefit “employment income”.
Ultimately, Vice-Chair Boyce held that Employment Insurance sickness benefits, Spence received due to the impairments she sustained in the motor vehicle accident, were not deducible by the insurer when calculating the quantum of her income replacement benefit.
Appeal to the Division Court scheduled for Summer 2022
Subsequent to Vice-Chair Boyce’s decision, Aviva Insurance requested a reconsideration of Vice-Chair Boyce’s decision.
The Licence Appeal Tribunal allowed Aviva Insurance’s request for reconsideration but upheld Vice-Chair Boyce initial decision.
Aviva Insurance has now requested an appeal of the Licence Appeal Tribunal decision at the Divisional Court level. This Divisional Court Appeal is scheduled to be heard in June of 2022.
We will wait to hear what the Divisional Court has to say on this issue next year.
Contact the personal injury lawyers at Tierney Stauffer LLP for Information and Advice on Accident Benefits
Dealing with an insurance company after you have been injured in an accident can be frustrating and time-consuming. The personal injury lawyers at Tierney Stauffer LLP will give you the advice you need to settle your accident insurance claim successfully so that you can recover financially and move on with your life. Please reach out to us by telephone at 1-888-799-8057 or contact us online to set up a free consultation with a member of our team.