Our client was injured in a 2017 motor vehicle accident and sought various benefits, including income replacement benefits (IRBs) from her accident benefits insurer. While there was no dispute as to whether our client met the test for IRBs, the accident benefits insurer argued that it was entitled to deductions of our client’s IRB payment. Specifically, it took the position that our client’s long-term disability (LTD) lump sum settlement of $120,000 should be deducted from her IRB payment.
Adjudicator Boyce found that our client’s LTD settlement was not deductible from her IRBs. The adjudicator accepted our position that while our client did settle her LTD claim, she had also made claims against her LTD insurer that included aggravated, exemplary and punitive damages, as well as claims for prejudgment interest, post-judgment interest, costs, disbursements, and HST. Therefore, the adjudicator concluded that our client received $120,000 in exchange for all claims against her LTD insurer which included the above listed non-LTD claims.
The adjudicator also concluded that there was no compelling evidence brought forth by the accident benefits insurer, which showed that there was a settlement breakdown between our client and her LTD insurer that would allow the accident benefits insurer to properly deduct from an IRB.