February 25, 2015

SABS Update: Electing for Benefits: Why not choose both

Toresho v. Primmum Insurance Company, 2015 ONSC 516, Superior Court of Justice, Glithero J.

The issue in this summary judgment motion was whether a person who applies for, qualifies for, elects to receive, and receives payment of income replacement benefits (IRBs) is eligible to later request non-earner benefits (NEBs).

Ms. Toresho was in a motor vehicle accident on May 17, 2006. She was employed at the time of the crash and applied for accident benefits. Two Disability Certificates were submitted that indicated she was entitled to IRBs as a result of being unable to perform the essential tasks of her pre-accident employment. Both also indicated she did not suffer a complete inability to carry on her normal life and the eligibility for a NEB was marked “no”.

Ms. Toresho elected to receive IRBs and these were paid by Primmum up until June 28, 2007 when an insurer examination found her capable of returning to work and the benefit was terminated. The issue of IRBs was mediated but failed and an action was commenced for payment of IRBs in May 2009.

Subsequently, in May 2010, Ms. Toresho’s counsel advised that she may qualify for NEBs. Primmum stated she was ineligible as she had qualified, elected and received IRBs and did not suffer a complete inability to carry on a normal life. The NEB issue was mediated but failed and an action was commenced for payment of NEBs in October 2011.

Primmum brought this motion for summary judgment to dismiss the plaintiff’s action for NEBs.

 

ANALYSIS

Here the applicable Statutory Accident Benefits Schedule (SABS) was the 1996 regulation. The regulation provided for payment of IRBs where an insured suffers a substantial inability to perform the essential duties of that employment, and the payment of NEBs where an insured suffers a complete inability to carry on a normal life and does not qualify for an IRB.

Although section 36 made it clear that only one type of benefit may be paid in a certain time period, based on the Court of Appeal decision of Galdamez v. Allstate Insurance Company of Canada (2012 ONCA 508) the motions judge held that contemporaneous actions for both IRB and NEB payments in respect of the same time period, can coexist.

With the application of section 36, Ms. Toresho could not receive NEBs for the period of time where she already received IRBs, even if she was entitled. As such the court granted partial summary judgment and dismissed Ms. Toresho’s claim for NEBs for the period of time when she was receiving IRBs. The summary judgment motion as it related to Ms. Toresho’s claim for NEBs for the time period after June 28, 2007 was dismissed. That portion of the claim, along with the claim for payment of IRBS, was to proceed forward to a resolution by the trial court on the question of which benefit, if either, are payable.

 

IMPLICATIONS

This decision opens up the door to switch between different types of “income” benefits. Electing and receiving one type of benefit is not a barrier to later applying for a different type of benefit, provided there will not be double payment in respect of the same time period. The insured will still have to meet the tests for the different benefits. Given the stringent test to obtain NEBs, only in unique circumstances will a person be able to perform the essential duties of employment, but are so disabled that they suffer a complete inability to carry on a normal life.

It is uncertain if the potential of switching between benefits would apply where the 2010 regulations are in place. The 2010 regulations use much stronger language regarding the election of benefits. Specifically, section 35(3) provides that an applicant’s election of IRB, NEB or caregiver benefit is final, but can be subsequently changed if permitted under subsection (2). That subsection allows a change in election after notice of a catastrophic determination.

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