Income replacement benefits are supposed to cover the income you lose due to accident injuries, but unfortunately, that is not always how it plays out. ICBC’s no-fault insurance model, also referred to as “Enhanced Care,” came into effect on May 01, 2021, and has fundamentally changed the rules for wage loss compensation in BC.
In this article, I provide a summary of how the income replacement benefits work under Enhanced Care for car accident victims in BC. You can read our previous blog post on ICBC’s no-fault insurance model or request a free initial legal consultation via our online form if you have further questions.
First Things First: Are You Eligible?
You are eligible to receive wage loss benefits if you were employed at the time of the accident and you are unable to work because of your injuries. Full-time, part-time, and temporary workers are eligible under Enhanced Care, but part-time and temporary workers must be reassessed if still unable to return to work 180 days after the accident.
Coverage is also available if you are a minor or student. You may be eligible for a lump-sum benefit for “loss of studies” where injuries prevent completion of a school year, in addition to income replacement benefits for wages that you would otherwise have been earned were it not for the injuries. What if your future career was unknown, and you were seriously injured? In most cases, after the scheduled end of your studies, you will receive income replacement at the “Industrial Average Wage,” which as of May 1, 2021 was $54,910.72.
Here is something you may be surprised to learn: even if you are eligible, you will not receive wage loss benefits until the 8th day after the accident. In other words, there is a 7-day waiting period before income replacement kicks in, and ICBC benefits do not cover your first week of lost wages.
The no-fault model is secondary to any other wage loss benefits available to you, such as an employer plan, Employment Insurance, or disability benefits. Because ICBC no-fault wage loss benefits are secondary, you MUST apply for other benefits first, and then your income replacement benefit calculation will take those benefits into account.
Who Is NOT Eligible to Receive Wage Loss Compensation Under Enhanced Care?
You are not eligible to receive wage loss benefits under the no-fault model if you were not employed at the time of the accident, unless you are able to prove that you had employment promised to you at the time of the accident. If you were retired when the accident occurred, you are not eligible for income replacement benefit or the retirement income benefit.
Calculating Your Wage Loss Benefits
The income you were earning before the accident determines how much you will receive. Establishing your yearly income can be challenging, depending on the nature of your work and how you are paid. For example, there are special considerations for calculating net income if you are self-employed, earn commission income, shift premiums, tips, or overtime pay, or experience seasonal fluctuations in work.
The income replacement benefit is calculated at 90% of your net income (your actual “take-home” pay”) before the accident, or 75% of your average gross weekly earnings, to the maximum yearly insurable amount. As of May 1, 2021, that maximum insurable income was $100,000. Any amounts you receive from other sources, such as EI or wage loss benefits paid from an employer plan, are subtracted from your income replacement benefit payment.
What Happens If You Earn More Than The Maximum Yearly Insurance Income Amount?
If you earn more than $100,000 a year and you do not have additional coverage, you will not be able to recover lost income over the maximum. If you are a high-income earner, it is highly recommended that you buy additional optional ICBC coverage to top up to a maximum of $200,000 in gross annual income and/or private income replacement coverage.
When Do You Stop Receiving Income Benefits?
Wage loss benefits under the no-fault model stop when you return to work or when ICBC determines that there is no medical reason preventing you from returning to work. There are some important deadlines you should know about. If you were a part-time, temporary or “non-earner” (i.e., unemployed) when the accident occurred, ICBC will assess your claim if you still can’t return to work after 180 days. If ICBC finds you are capable of holding employment it determines for you, your benefit entitlement will end.
Regardless of your type of employment, if your injuries are preventing you from returning to your previous employment two years after the accident, ICBC will assess your claim and give you one year to look for new employment that it determines for you, offsetting the income replacement benefit with any income you earn.
Contact STA if You Have Questions
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