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A person’s contract with their own auto insurance company includes the potential payment of Income Replacement Benefits. This benefit is mandatory to all Ontario automobile insurance policies and it is defined under section 4 of the Statutory Accident Benefits Schedule (SABS). The Income Replacement Benefit intends to compensate a person who, within 104 weeks after the collision, and as a result of the collision, suffers a substantial inability to perform the essential tasks of their employment.

Substantial inability test

The central point in qualifying for Income Replacement Benefits hinges on whether the person suffers a “substantial inability to perform the essential tasks of their employment.” This test involves a two-step analysis. The first step is to determine the essential tasks of the persons’ pre-accident employment. The second step is to determine whether the person is substantially unable, as a result of the accident, to perform those tasks.1

It is also possible that persons who were not employed at the time of the accident can claim this benefit if:

  • they have been employed for at least 26 weeks during the 52 weeks before the accident, or were receiving employment insurance when the accident happened;
  • they were at least 16 years old or excused from attending school at the time of the collision; and
  • they suffered a substantial inability to perform the essential tasks of the employment in which the person spent the most time during the 52 weeks before the accident.

Self-employed individuals are also entitled to receive Income Replacement Benefits.

Calculating Income Replacement Benefits

Income Replacement Benefits are calculated on a weekly basis. The benefit can be up to $400 per week. It can be more (e.g. up to $1,000/week) if optional Income Replacement Benefits were purchased when contracting the automobile insurance policy. Factors considered in the calculation of Income Replacement Benefits are the gross salary of the person prior to the collision, any gross employment or self-employment income that the person may earn after the collision, as well as any other income replacement assistance (e.g. short or long-term disability benefits, CPP-disability benefits) that the person may be entitled to receive. Income Replacement Benefits also ramp down when the injured person turns 65 years old.

Duration of Income Replacement Benefits

Except for the week immediately after the collision, Income Replacement Benefits are available for 104 weeks after the collision. After this period, Income Replacement Benefits are still available for those who, as a result of the accident, suffer “a complete inability to engage in any employment or self-employment for which the person is reasonably suited by education, training or experience.” The threshold for entitlement to post-104-week Income Replacement Benefits is significantly higher.

Complete Inability Test

In the decision Rumball, the Divisional Court determined that, to qualify to receive Income Replacement Benefits 104 weeks after the collision, the injured person must meet exactly the test on section 6(2)(b) of the SABS. It is necessary that “as a result of the accident, the insured person is suffering a complete inability to engage in any employment for which he or she is reasonably suited by education, training or experience”. However, the Divisional Court determined that “suitable employment” does not mean “employment in a competitive, real-world setting, considering an employer’s demands for reasonable hours and productivity, [or] comparable in terms of status and wages [to the pre-accident employment].”2


If you were injured in a motor vehicle collision and not able to return to work, or have returned with modifications, you may qualify for Income Replacement Benefits under the SABS.

Mariana Peres Toledo practices with the Siskinds Personal Injury department. If you have questions about the information contained within this article or any other personal injury questions, please write to [email protected] or call 226.636.1526.

1 Aized v The Co-operators, 2023 CanLII 7270 at para 9.

2 Traders General Insurance Company v Rumball, 2022 ONSC 7215 at para 60.

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