What are Non-Earner Benefits?

There are over a million full-time students furthering their studies in Canada. Dedicating much of their time to studies, these students can’t work. Thus, they’re legally considered non-earners. Along with people on disability benefits, unemployed, and retirees, non-earning people in Ontario may get some benefits if involved in a motor vehicle accident.

Suppose you or a loved one is a non-earner and has been involved in a motor vehicle accident. In that case, you should understand the benefits you/they are entitled to in accordance with the Statutory Accident Benefits Schedule.

Determining whether you are a non-earner is relatively straightforward. However, qualifying for non-earner benefits is quite a complicated process. This article from our personal injury lawyer in Toronto explains what NEBs are, their eligibility, how they differ from Income Replacement Benefits, and how long NEBs are paid in Ontario.

What are Non-Earner Benefits?

There are accident benefits available to all drivers, regardless of who is at fault in a motor vehicle accident. These benefits are known as Statutory Accident Benefits Schedule. That means if you are earning income at the time you get involved in a car accident, you may be eligible for Income Replacement Benefits.

For those who are not eligible for these benefits, non-earner benefits might be available. These are forms of weekly compensation stated in Section 12(1) of the SABS.

Non-Earner Benefits Test

According to Section 12 (1) of the Statutory Accident Benefits Schedule, you (the claimant) must meet the following conditions to be eligible for NEBs.

Suffer a complete inability to live a normal life within 104 weeks following an accident and:

• Aren’t eligible for Income Replacement Benefits.
• You are enrolled on a full-time basis in a secondary, elementary, or post-secondary learning institution at the time of the motor vehicle accident.
• You completed your education less than a year before the vehicle accident and were not employed or self-employed in a capacity that reflected your education.

SABS also specifies the non-earner benefit amount – $185 weekly during the period that you sustain a total inability to lead a normal life. If you still receive other forms of income replacement assistance, it should be deducted from the NEBs weekly payments. There are circumstances under which an insurance company isn’t required to pay NEBs. These include:

• The first 4 weeks after the onset of the claimant’s inability to lead a normal life
• Before the claimant is at least 18 years
• For over 104 weeks after the accident
• The claimant is eligible for caregiver benefit or Income Replacement Benefit

Note that this type of accident benefit is available for claimants who haven’t worked 26 to 52 weeks before the accident. Though SABS specifically mentions full-time students and recent graduates, other people with different forms of disabilities, unemployed individuals, and retirees may also be eligible.

Are Non-Earner Benefits Taxable?

Now that you know how much is non-earner benefits, the question is, is this amount taxable? Well, the Canadian Income Tax Act exempts the income from property received as an award of damages in respect of mental or physical injury from taxation.

According to the CRA, all amounts that qualify as general or special damages for death or personal injuries are excluded from taxable income. Even if part of NEBs may have been determined with reference to your loss of earnings – a form of replacement for what would have been taxed -, your NEBs will not be taxed.

Non-Earner Benefit Test

The eligibility test for non-earner benefits in Ontario can be a complex one. Therefore, the Ontario Court of Appeal, in the case of Heath vs. Economical Mutual Insurance Company (2009), offered several general principles considered a “proper approach” to the interpretation and application of the relevant sections of the SABS when assessing a claimant’s eligibility for NEBs.

The Ontario Court of Appeal emphasized the analysis and comparison of the claimant’s activities and life circumstances before and after the accident. This comparison can’t be a mere “snapshot” of the claimant’s life immediately before the accident. It should be a comprehensive review of all the life circumstances over a specified period before the vehicle accident – so this review is often fact-specific for each claimant.

In the case mentioned previously, the Ontario Court of Appeal clarified that all pre-accident activities and circumstances of the claimant must be considered when determining if the claimant could partake in “substantially all” pre-accident activities.

Further, the court noted that the activities that played more significant roles in the claimant’s life should be given more weight than activities that played minor roles. This approach, according to the court, is a more “claimant-focused inquiry” when it comes to assessing a claimant’s eligibility for non-earner benefits.

Additionally, the court interpreted “engaged” and “continuously prevents” aspects of a claimant’s life. According to the court, being “continuously prevented” from various activities will require the claimant to successfully prove “incapacity or inability of the requisite nature, its degree or extent, and whether it remains uninterrupted.”

In terms of being “engaged” in a particular activity, the court pointed out that merely going through the emotions of a particular activity wasn’t enough. Also, the claimant’s manner and quality of activity performance should be considered.

Lastly, the Ontario Court of Appeal indicated that the severity of the claimant’s pain while engaging in their pre-accident activities must be considered. According to the court, the severity of the claimant’s pain, either while they performed the activity or thereafter, can indicate whether the claimant would be “prevented from engaging in such activities” by the injuries associated with an accident.

Income Replacement Vs Non-Earner Benefit

You are probably wondering if you can qualify for NEBs while receiving other income. Well, in 2012, the Ontario Court of Appeal visited this issue and offered valuable insights. The NEBs are often considered the last resort accident benefits you may apply for if you are not eligible for caregiver benefits (for victims of catastrophic injuries) or Income Replacement Benefits.

In the lawsuit of Galdamez v. Allstate, the court clarified that the NEBs were specifically for claimants who aren’t eligible to get Income Replacement Benefits as stated in the Statutory Accident Benefits Schedule. However, the SABS doesn’t specifically state that you (the claimant) can’t be working when you apply for NEBs.

As such, there are circumstances under which you could be working at the time of the accident and still be eligible for NEBs. Suppose you worked full-time at a job that can’t be considered a significant activity you could be engaged in, and you return to the same job after an accident. According to the court, you may qualify for NEBs.

Let’s consider this example. Suppose an artist worked as a parking attendant before an accident and after the accident is unable to paint but can still work as a parking attendant. In that case, the claimant’s lawyer can make an argument for eligibility for NEBs. If the artist’s primary focus in life was artistry and can’t continue in that line of work due to impairments after the accident, then this claimant qualifies for NEBs.

It seems the Ontario Court of Appeal opened the door for circumstances under which a claimant can be eligible for NEBs while earning income.

Conclusion

It’s not easy for you (a claimant) to prove that, due to an accident, you sustained injuries that continuously keep you from effectively engaging in all the activities you ordinarily engaged in before the vehicle accident. However, with the help of an experienced lawyer, it’s possible to assess and compare your activities before and after the accident, the significance of these activities on your life, and the extent to which you can engage in those activities after the accident. This can increase your chances of qualifying for NEBs.