What is an Income Replacement Benefit?

Statutory accident benefits (“accident benefits”) are a type of no-fault insurance coverage attached to every automobile insurance policy in Ontario. “No fault” means you may be entitled to these benefits, if you were involved in a car accident, regardless of who was at fault for the accident. The law which governs accident benefits is a regulation made under the Insurance Act.  One important example of accident benefits is an Income Replacement Benefit, or an “IRB” as it is colloquially referred to.

What is an Income Replacement Benefit?

An IRB pays weekly compensation to working people, students, children, retired people and unemployed people who were injured in a car accident.

You can only receive an IRB if, as a result of your car accident, you “suffer a substantial inability to perform the essential tasks of your employment” (including self-employment). A number of considerations go into determining whether a person satisfies this criteria to receive an IRB.

This includes, for example:

• You must be substantially prevented from engaging in your pre-collision employment tasks; and
• You must have worked 26 out of the last 52 weeks, pre-accident.

How much can I be paid from an IRB?

Generally, if you are entitled to an IRB, you will receive a weekly amount that is either:

• 70% of your gross income (as calculated before your accident); or
• $400 – whichever number is lower.

Did you know, you can increase the amount you may be entitled to from an IRB by speaking to your insurance company (before any accident) and asking for optional benefits to increase your IRB to a maximum of $1,000 per week (instead of $400 per week)?

It is especially important to increase your IRB if 70% of your current salary would be more than $400!

For how long can I receive an IRB?

As long as you meet the criteria above, you would be entitled to an IRB for at least 2 years after an accident.

After 2 years, the criteria for qualifying for an IRB changes, and becomes more difficult to satisfy. The criteria changes to the following:

• As a result of the accident, you must suffer a complete inability to engage in any employment for which you are reasonably suited by education, training, or experience.

Your insurance company will usually have you examined by a doctor of their choosing to determine if you meet the criteria to receive an IRB. It is important you speak to a personal injury lawyer to understand all your options, and protect yourself from unfair assessments or if the insurance company refuses to pay your IRB.