Ontario Licence Appeal Tribunal rules that active/passive income is not an IRB consideration

January 10, 2018

On January 10, 2018, Adjudicator Robert Watt of the Ontario Licence Appeal Tribunal published his written decision in a dispute between “A.S.” and Economical Mutual Insurance Company (Tribunal File Number: 16-003197/AABS). The Adjudicator held that an insurer is entitled to deduct post-accident income from a claimant’s business in determining an Income Replacement Benefit (“IRB”) amount under the Statutory Accident Benefits Schedule (“SABS”).

The claimant A.S., a chiropractor, had to hire another chiropractor to treat patients after suffering a November 2015 accident. While not active in the day to day operations of the business, the claimant continued to be responsible for the control of the business and made all of the major business decisions.

The Adjudicator held that the SABS does not differentiate between passive and active income. Accordingly, the test was not whether or not the claimant was active in the business, but simply whether or not he had income from the business.

The claimant did have income from the business, even though he was less involved in the business and making less money. The significance of that fact, as applied to the case, was that the deductible post-accident income was greater than the $400 a week maximum IRB, such that there was a complete set off and thus, there was no IRB payable.

Ashleigh Leon represented Economical Mutual Insurance Company in these proceedings.