Spotlight on SABS: Income Replacement
This is the latest in our series on what benefits you’re entitled to through your auto insurance if you’re injured in a car accident in Ontario. These are no-fault benefits, meaning that anyone involved in the crash is covered, regardless of who was at fault, or whether they were a driver, passenger, pedestrian, cyclist, etc.
Today’s post is all about income replacement benefits, and you can find links to the other posts in this series at the end of this article.
What are Income Replacement Benefits?
In Ontario, income replacement benefits are designed to replace a portion of your income if you can’t work following a car accident.
For many people, especially if you were the primary earner in your family, the amount available through income replacement–a maximum of $400 per week, unless you had purchased additional coverage–is not nearly enough to live on.
For that reason, we strongly encourage you to speak with a lawyer to ensure you are getting these and any other accident benefits you may be entitled to.
Who Can Receive Income Replacement Benefits?
There are four main qualifications; you need to meet one or more of them:
- You were employed at the time of the accident (including self-employed)
- You were receiving EI benefits at the time of the accident
- You worked at least 26 weeks out of the 52 weeks before accident
- You were at least 16, excused from attending school, and not working
Regardless of whether your injuries are physical, mental or psychological, if you meet one or more of those criteria and are “substantially unable to perform the essential tasks” of your employment, then you are eligible for income replacement benefits.
How Much Can I Receive in Income Replacement Benefits?
You can receive 70% of your gross weekly income, up to a maximum of $400, whichever is less. That is the basic amount that’s included in standard auto insurance, but if you opted to purchase additional coverage, your limit may be higher than $400 per week (potentially up to $1000 a week). Benefits are paid every 2 weeks.
Your income replacement benefits can be reduced (“offset”) if you have other income replacement sources, such as through your extended health benefits at work, CPP Disability, WSIB, etc.
How Long Can I Receive Income Replacement Benefits?
There are no benefits paid the first 7 days after the crash. After that, so long as you have “a substantial inability to perform the essential tasks of that employment”, you can receive income replacement for up to 2 years (104 weeks).
After 2 years, you’ll face the “own occupation/any occupation” test–meaning that you will have to prove that you have a complete inability to engage in any employment or self-employment for which you’re reasonably suited by education, training or experience. If you continue to meet that criteria, you can keep receiving income replacement benefits for the rest of your life.
If you turn 65 while you are receiving income replacement benefits, the benefit amount will be reduced quite substantially. The rationale for this reduction is that you would in theory be retiring at 65 and no longer earning employment income.
Anything Else I Should Know About Income Replacement Benefits?
- Time is of the essence: you must apply for income replacement benefits within the 7 days following the crash.
- If you are receiving caregiver benefits or non-earner benefits, you will not be eligible for income replacement benefits.
- Find more details on Ontario auto insurance income replacement benefits in Part II of the SABS.
This article is part of our series on Ontario no-fault auto insurance benefits. Previous posts cover: