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Income Replacement Benefits And CERB: To Deduct Or Not To Deduct? – Take 2

By Kayley Richardson

The Applicant sought reconsideration of the Tribunal’s decision in Foster v. Aviva General Insurance[1], that was previously discussed on our blog. Our previous blog post can be found here.

At first instance, Adjudicator Ferguson had concluded that the Canada Emergency Response Benefit (“CERB”) was akin to other remuneration from employment and since it was considered “gross employment income” as defined under s.4.(1) of the Statutory Accident Benefits Schedule O. Reg. 34/10 (the “SABS”), it was deductible from IRBs payable.

In an extremely rare situation, in its responding submissions on the reconsideration request, the respondent agreed with the applicant that the Tribunal made an error of law in determining that CERB was deductible from IRBs under the SABS.

The applicant requested reconsideration pursuant to Rule 18.2(b) on the grounds that the Tribunal committed errors of law and fact in reaching its decision such that the Tribunal would likely have reached a different decision had they not been made.[2] 

In his reconsideration decision, Vice-Chair Jesse Boyce held that Adjudicator Ferguson incorrectly classified CERB as gross employment income and other remuneration from employment. He held:

[10] Whereas IRBs are directly related connected to, and calculated with respect to, an  insured’s pre-accident earnings, CERB is not calculated with reference to income from employment. Indeed, everyone who is eligible receives the same amount without reference to the amount of income they earned pre-pandemic. As CERB/CRB eligibility is not tied to employment status, it follows that it cannot be considered “gross employment income”[and] … it cannot be deducted from an IRB under s.7(3)(a). [emphasis added]

[11] The Report (the Applicant’s IRB report prepared by ADS Forensic Accountants dated October 5, 2021) argues that being employed is not a prerequisite to receiving CERB and the applicant did not receive same as a result of being employed after the accident, meaning that CERB cannot be deducted from IRB under s.7(3).

Vice-Chair Boyce concluded that there was an error of law for the Tribunal to determine that CRB/CERB is deductible from IRBs, and held that the Applicant was entitled to the full amount of IRBs.

In deciding that CERB is not deductible from IRBs, the LAT provides clarification for both applicants and insurers when determining the quantum of IRBs payable. In some circumstances, it may have the impact of allowing a claimant collecting CERB to potentially double-dip.

Conversely, as CERB is not considered “gross employment income”, it cannot be the basis for determining a claimant’s IRB entitlement, and should not be included in the claimant’s pre-accident income when calculating the quantum of weekly IRBs.

[1] Foster v. Aviva General Insurance, 2021 CanLII 117413

[2] Rule 18 of the Licence Appeal Tribunal, Animal Care Review Board, and Fire Safety Commission Common Rules of Practice and Procedure, Version I (October 2, 2017).