Are workers compensation benefits deductible?
If you are injured in a motor vehicle accident, Section B of your auto insurance provides you with, amongst other things, weekly indemnity benefits to supplement any loss of “income from employment” you may suffer. You are eligible to receive Section B benefits regardless of who was at fault for the accident.
The weekly indemnity benefits will be the lesser of $250.00, or 80% of your gross weekly income from employment less any “payments for loss of income from employment received by or available to” you by way of law (from the government) or available through “wage or salary continuation plans” available through your employment. This is meant to prevent you from recovering more income from benefits than is needed to compensate for your loss of income.
Specifically, one benefit that may be deductible from your Section B benefits are your workers’ compensation benefits, as was discussed in the recent Nova Scotia case of McLean v. Portage la Prairie Mutual Insurance Company, 2018 NSSC 110 (CanLII). In the McLean case, the plaintiff was injured in 2004 and began receiving workers’ compensation benefits. He received workers compensation benefits through 2010 and it was determined that he would continue to receive these benefits on an ongoing basis whether he was employed or not.
The plaintiff was later injured in a motor vehicle accident in 2013 and his insurer paid weekly Section B benefits to him for a period of time before terminating payment. The termination of these benefits was the source of the dispute in this case.
Ultimately, the Nova Scotia Supreme Court held that a Section B insurer could deduct workers compensation benefits that the plaintiff was receiving at the time of the accident from his weekly indemnity (or Section B) benefits. The Court characterized workers compensation benefits as not being “income from employment”, but rather, a “payment[s] for loss of income from employment”. Therefore, his workers’ compensation benefits were not included in determining his income, but were deemed as being deductible from his weekly indemnity benefits.
Prince Edward Island Courts have not yet looked at the deductibility of worker compensation benefits from weekly indemnity benefits, but have done so with other types of insurance, such as the optional SEF 44 coverage. It will be interesting to see whether the Prince Edward Island Courts arrive at a similar conclusion to the Nova Scotia Supreme Court, or take a different view of this issue.
For a further breakdown of the coverages in your auto insurance policy including Section B, and the optional SEF 44, consider reading this post. If you are having an issue with your Section B coverage, or some other personal injury related matter, Key Murray Law’s Personal Injury Lawyers are happy to discuss your matter with you.
Legal information appearing in this article and elsewhere on Key Murray Law’s website is intended for informational purposes only and is not intended to substitute for or replace any legal or other professional advice. If you have specific concerns or a situation in which you require legal advice, you should consult directly with one of our lawyers.