ICBC Coverage for Past Income Loss

What is ICBC Coverage of Past Income Loss?

In your ICBC claim you may be entitled to past income loss if you were unable to work as a result of your accident.  Past income loss covers all loss of earnings from the date of the accident to the date of trial or settlement. The courts deal with past and future income loss separately because of the evidentiary differences: future income loss often requires projections as to the likely employment paths of the plaintiff, but for past income loss the employment (or lack) of the plaintiff is known at the time of trial or settlement.

In most cases, past income loss is a simple calculation: if you missed three months of work, and you would have been paid $2,000/month, your past income loss is $6,000. However, in some cases it is more complicated, e.g. entrepreneurs or commission-based workers. For these cases, it is important to collect evidence of any lost contracts/sales/business opportunities. You can also claim the cost of any helpers who are hired, or extra hours paid to current employees to perform work you would have done.

Net vs. Gross Income

ICBC can deduct income tax that would have been paid on the lost income – they only pay net income loss, not gross income loss. If your tax rate on the income lost would have been 20%, then ICBC is only required to pay 80% of your gross income loss. For a gross income loss of $6000, ICBC would pay $4800. However, you do not have to pay income tax on the money that ICBC pays to you.

Part 7 and Employment Insurance (EI) Benefits

If you received Part 7 income replacement benefits, ICBC can deduct those amounts from the past income loss portion of your tort claim. However, ICBC cannot deduct EI sickness benefits (except for uninsured/underinsured drivers or hit & run accidents).

Sick Days

ICBC will often refuse to pay past wage loss if you received pay by claiming sick days. However, if you have the right to cash out sick days, or if they are bankable and you can replenish that bank, you should include those sick days as part of your tort claim.

Private Insurance Income Replacement Benefits

If you received income replacement under a private insurance plan, ICBC will often try to deduct those benefits from your past wage loss claim. They are not allowed to do so if you can show that: (1) those benefits must be repaid to the private insurer (e.g. a subrogated claim), or (2) you paid for that private insurance out of your own income (either directly or indirectly via a payroll deduction or collective agreement).

Missing Work for Unrelated Reasons

If you missed work for a reason unrelated to the accident, ICBC is not required to pay income loss for that period. If you had a vacation booked, or if you were going to be laid off, your past income loss claim could be reduced to account for the loss that would have occurred even if you hadn’t been injured.

Date last reviewed:  October 1, 2019


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