Released February 25, 2016 | Full Decision [Document Bank]
This arbitration was to determine whether monies received for providing attendant care to a child/family member constitute post-accident income that is deductible from the amount of the applicant’s income replacement benefits.
On October 31, 2012, the applicant’s son, C.C., was involved in a motor vehicle collision that resulted in life threatening injuries and a determination of catastrophic impairment, requiring 24-hour attendant care supervision. C.C.’s mother, the applicant, was his primary care provider and was subsequently paid the attendant care benefit. The applicant was also in receipt of Income Replacement Benefits, until the insurer determined that the monies received for providing attendant care to her son constituted a post-accident income.
The Insurer argued that the monies being received by the applicant were considered “income from self-employment” and should be considered an “other type of business”. The Insurer also argued that these monies would be considered income in the hands of a third-party service provider, and should thus be considered income in the hands of the applicant. The insurer argued that these monies should be deducted from the applicant’s Income Replacement Benefit.
The applicant argued that the attendant care money was not income, and that she was not involved in situation of self-employment. Particularly, the applicant pointed to two informal decisions from the Tax Court, which suggested that these kinds of monies are not considered income for the purpose of the Income Tax Act. The applicant submitted that the monies received for providing attendant care to her son are more akin to gifts, inheritance, or allowance between family members, or other transactions that are not taxed.
Arbitrator Fadel concluded that “the payments being received by the applicant for the attendant care she is providing to C.C. are not considered income from self-employment”. Further to this, Arbitrator Fadel stated at page 4 of his decision:
“Also, I find that the new definition of “incurred” in the Schedule does not state or imply that the attendant care monies being received by a family member should be considered income for the purpose of s. 7 of the Schedule. Further, the new economic loss requirement does not imply that the payments in turn are to be considered income.
The immediate implication of this decision is that, for the purpose of the Schedule at s.3(7)(e), attendant care benefits paid to a family member are not considered income. The applicant’s income replacement benefit should not have been reduced. Arbitrator Fadel further concluded that “if the Legislature intended that monies paid under this section were to be considered income for the purpose of the Schedule, it would have stated so.”
Counsel for the Applicant: Sumitra Lagoo and Daniel Roncari, Hamilton Ont.
