{"id":3009,"date":"2019-07-17T09:00:43","date_gmt":"2019-07-17T13:00:43","guid":{"rendered":"http:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/?p=3009"},"modified":"2020-06-15T12:18:19","modified_gmt":"2020-06-15T16:18:19","slug":"calculating-pre-accident-income-when-considering-self-employment-losses","status":"publish","type":"post","link":"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/calculating-pre-accident-income-when-considering-self-employment-losses\/","title":{"rendered":"Calculating Pre-Accident Income When Considering Self-Employment Losses"},"content":{"rendered":"

[vc_row][vc_column][basic_container container_size=”container container-narrow” bg_overlay=”overlay-light”][vc_column_text]In the LAT reconsideration decision released on June 5, 2019, Aviva Insurance Canada v. W.D.W. (17-005894\/AABS), it was determined that the Tribunal made an error in law in its calculation of the quantum of the claimant\u2019s income replacement benefits (\u201cIRBs\u201d) payable in its initial decision dated May 4, 2018 (\u201cInitial Decision\u201d).<\/p>\n

Prior to the accident, the claimant was self-employed operating a farm and<\/u> a corporation.\u00a0 The farm reported income<\/strong> of $52,995.00 on the claimant\u2019s personal income tax return and the corporation reported losses<\/strong> of $50,054.58 during the last fiscal year ended before the accident.<\/p>\n

The Initial Decision did not deduct the corporate losses incurred by the claimant from his pre-accident income earned for purposes of determining the quantum of his IRBs.\u00a0 The Initial Decision also deducted the claimant\u2019s post-accident income earned from 70% of his gross weekly pre-accident income earned prior to applying the policy limit.<\/p>\n

As a result of the above, the Initial Decision determined the claimant\u2019s IRBs to be $400.00 per week.<\/p>\n

However, Section 7(2)(1)(i) of the SABS determines the \u201cweekly base amount\u201d for IRB purposes to be 70% of employment and self-employment income that exceeds<\/u> weekly loss from self-employment. \u00a0Therefore, both self-employment income and losses from self-employment (including a closely held corporation) are to be considered when calculating IRBs payable.<\/p>\n

Similarly, Section 7 of the SABS outlines that 70% of post-accident income is to be deducted from the lesser of:\u00a0 the \u201cweekly base amount\u201d less collateral benefits received, and the policy limit of $400 per week.<\/p>\n

The Initial Decision erred in not deducting the corporate losses incurred by the claimant from his pre-accident income earned and deducting post-accident income from his weekly base amount prior to applying the policy limit.<\/p>\n

Considering the above, the Tribunal granted the request for reconsideration and revised the calculation of the claimant\u2019s IRBs payable to be $Nil. \u00a0Accordingly, the claimant was required to repay the amount of IRBs received in error from the insurer.<\/p>\n

Read the reconsideration decision in full detail here:<\/h4>\n

Aviva Insurance Canada v. 17-005894, 2019 CanLII 63360 (ON LAT)<\/em><\/a><\/p>\n

Read the initial decision in full detail here:<\/h4>\n

17-005894 v WDW, 2018 CanLII 81989 (ON LAT)<\/em> decision<\/a>[\/vc_column_text][\/basic_container][\/vc_column][\/vc_row][vc_row][vc_column][basic_container]

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A growing trend has emerged recently as it relates to individuals making a claim for income replacement benefits (\u201cIRBs\u201d). \u00a0More frequently than ever, insured\u2019s seem ...<\/p>\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\tRead More<\/span>\r\n\t\t\t\t\t\t\t<\/a>\r\n\t\t\t\t\t\t\t\t\r\n\t\t\t\t

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For self-employed individuals seeking to claim an income replacement benefit (\u201cIRB\u201d), the calculation of their pre-accident gross weekly income is not always straightforward.\u00a0 Two recent ...<\/p>\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\tRead More<\/span>\r\n\t\t\t\t\t\t\t<\/a>\r\n\t\t\t\t\t\t\t\t\r\n\t\t\t\t

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In the LAT decision released on January 13, 2020, T.A.K. v Aviva General Insurance Company (18-008232\/AABS), the Adjudicator provides interpretation for the Section 8(1) adjustment ...<\/p>\n\t\t\t\t<\/div>\r\n\t\t\t\t\t\t\t\t\tRead More<\/span>\r\n\t\t\t\t\t\t\t<\/a>\r\n\t\t\r\n\t\t\t\t\t

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Prior to the accident, both parties agreed the Applicant was employed earning $19,847.96 during [...]","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-3009","post","type-post","status-publish","format-standard","hentry","category-insurance-claim-and-litigation-updates"],"acf":[],"yoast_head":"\nCalculating Pre-Accident Income When Considering Self-Employment Losses - Davis Martindale<\/title>\n<meta name=\"description\" content=\"Summary of LAT reconsideration: Tribunal reconsiders initial decision for calculating claimants pre-accident income from self-employment. 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