Heard April 25, 2015 | Document Bank
The Applicant had been receiving CPP disability benefits since 1994. Approximately sixteen years later on March 1, 2010, the Applicant was injured in a motor vehicle accident. Following this accident, the Applicant continued to receive CPP disability benefits. She also applied to her automobile insurer for non-earner benefits.
A preliminary issue arose as to whether the Insurer was entitled to deduct the Applicant’s receipt of pre-accident disability benefits under the Canada Pension Plan Act R.S.C., 1985 Chap C-8 (“CPP”) from any non-earner benefits paid by the insurer under the Statutory Accident Benefits Schedule – Accidents on or After November 1, 1996 (O.Reg. 403/96) (“the SABs”). The Insurer supported its position by reasoning as follows:
- Benefits under the SABs are excess insurance as compared to any other insurance policy indemnifying an injured person under section 268(6) and (7) of the SABs.
- CPP disability benefits are ensnared within the definition of “payments for loss of income under an income continuation benefit plan” for accidents that occur on or after January 1, 2002 pursuant to section 2(9) and (10) of the SABs.
- The insurer has discretion to deduct net weekly payments for loss of income that are received under the laws of any jurisdiction or any income continuation benefit plan under section 12(4)(1) of the SABs.
- Pre-accident CPP disability benefits are temporary benefits or periodic temporary benefits in nature and are therefore deductible pursuant to section 60 of the SABs.
The Applicant did not dispute that the SABs constitutes excess insurance or that as of January 1, 2002, CPP disability benefits fall within the definition of an income continuation plan under the SABs. However, it was asserted that although section 12(4)(1) of the SABs permits the Insurer to deduct income from an “income continuation plan” from non-earner benefits payable to the Insured, the section clearly sets out that such a deduction can only be made if entitlement to both benefits arises as a result of the accident. Further, CPP disability benefits are not defined or referenced as being a deductible “temporary benefit” or a “temporary periodic benefit” under sections 60(1), 60(3) or 60(3)(h) of the SABs. Rather, CPP disability benefits are, by definition, long and indefinite in nature and are therefore not temporary benefits under the SABs.
Arbitrator Alves agreed with the Applicant. She found that:
- The Applicant had been in receipt of CPP disability benefits since 1994, well before the March 1, 2010 accident. Therefore, the Insurer was not entitled to deduct CPP disability benefits from the Applicant’s non-earner benefits because her pre-accident receipt of CPP disability benefits was not “as a result of the accident” as contemplated by section 12 (4) of the SABs.
- Under section 60 of the SABs, CPP disability benefits are of long and indefinite duration (as defined in Schekene and Co-operators General Insurance Company, OIC A95-000314, March 17, 1997 and Laporte v. Dominion of Canada, [2000] O.J No. 8181 S.C.J.) and not a temporary benefit paid under an income continuation benefit or plan or law. Further, in order to qualify for CPP disability benefits, a person must suffer from a severe and prolonged mental or physical disability which is likely to be continued and of indefinite duration or is likely to result in death under section 42(2) of the Canada Pension Plan Act, R.S.C. 1985, c. C-8.
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