Under the Accident Benefits regime in Ontario, if you are employed at the time of your accident you are required to elect whether you wish to make a claim for non-earner benefits or income replacement benefits. For most claimants it would make sense to elect income replacement benefits. However, for some claimants the line becomes blurry and the decision is particularly important where the income replacement benefit would be less than the set non-earner benefit amount.  Before continuing, it is beneficial to review what both these terms mean.
Income Replacement Benefit (“IRBs”)
If you unable to work because of the injuries caused by a motor vehicle accident and if you are eligible, this benefit will partially cover your loss of income. Â To qualify for IRBs you must be (a) be employed at the time of the accident and (b) must suffer a substantial inability to perform the essential tasks of your employment.
Non-Earner Benefit (“NEBs”)
You may be entitled to claim a non-earner benefit if you suffer a complete inability to carry on your normal activities because of the injuries cause by a motor vehicle collision and do not qualify for an income replacement benefit.
Ms. Hafya Galdamez (“Galdamez”) was required to make the same election when she was injured by a car that ran over her foot on October 26, 2002. Galdamez returned to work only four days after her accident on modified duties and eventually left her employer in January 2004. She has not worked since.
On January 7, 2003, Galdamez applied for statutory accident benefits. The insurer informed her that she “may be eligible for more than one weekly benefit.” Subsequently, Galdamez indicated to the insurer that she wished to receive income replacement benefits.  On January 28, 2003, the insurer denied Ms. Galdamez’s claim for IRBs. After a failed attempt at mediation, Galdamez sued Allstate for failure to pay her IRBs among other things. Allstate argued that Galdamez did not qualify for IRBs because she did not “suffer a substantial inability to perform the essential tasks of her employment” as she was able to return to work after the accident.
In 2009, Galdamez wrote to Allstate and applied for non-earner benefits. Again, Allstate denied her request and the motions judge sided with Allstate. The motions judge held that Galdamez was not able to qualify for NEBs simply because she was employed at the time of the accident. In other words, she either qualified for the income replacement benefit or nothing at all.
The Court of Appeal made it clear that this interpretation of the law was wrong. The Court held that NEBs are payable where the claimant is not eligible for IRBs and suffers a complete inability to carry on his/her normal activities due to the injuries caused by a motor vehicle collision. It is important to note that the Court made it clear that “complete inability” means that an injured person must be “continuously prevented from engaging in substantially all of the activities in which the person ordinarily engaged in before the accident.” Simply put, “substantially all” does not mean all.
Ultimately, the Court held that just because Ms. Galdamez was able to return to work, this doesn’t necessarily mean that she was not prevented from engaging in “substantially all” of the activities she normally took part in before the accident.  This is significant because it highlights that a good personal injury lawyer understands the importance of painting a picture of the injured person’s pre-accident and post-accident life. All facets of the client’s life need to be explored before a lawyer is in a position to properly advise the injured person as to whether it will be more beneficial to elect IRBs or NEBs.
You can read the full decision here: Galdamez v Allstate Insurance Company of Canada, 2012 ONCA 508
Kevin Butler and Jonathan Wright are Ottawa-based lawyers practicing in the areas of Civil Litigation and Personal Injury at Mann & Partners, LLP. The articles on this blog are not intended to provide legal advice. Should you require legal advice, please contact Mann & Partners, LLP at 613-722-1500.
