Will the insurance company pay less if you were already receiving disability benefits at the time of the car accident?

Published on January 31, 2017

People injured in car accidents who are not eligible for income replacement benefits can apply for a non-earner benefit.  This is a benefit that may be available under the “no-fault” statutory accident benefits system, regardless of who was at fault for the accident.

The non-earner benefit pays $185 per week to eligible accident victims.  If you were a student at the time of the accident, the amount increases to $320 per week if you are still eligible after two years.

But what happens if you were already receiving a disability benefit at the time of the car accident?  Can the insurance company cancel out your non earner benefit because it would be “double-dipping”? 

This is exactly what the insurance company tried to do in the arbitration decision Niforos v. Allstate Insurance Company of Canada FSCO A13-007892.  In this case Ms. Niforos was already receiving CPP disability benefits when she was involved in a car accident.  As a result of the accident she suffered a complete inability to carry on a normal life and was eligible for non-earner benefits from Allstate. 

Allstate tried to reduce the amount of non-earner benefits by the sum Ms. Niforos was already receiving as a disability benefit from CPP.  Ms. Niforos disputed this determination and the issue went to arbitration.

According to the Statutory Accident Benefits Schedule, collateral benefits such as CPP disability benefits are only deductible if they were being paid as a result of the accident or were temporary in nature.

In the Niforos case, the arbitrator concluded that Ms. Niforos was already being paid CPP disability benefits when the accident happened.  In addition, CPP disability benefits are only paid to people who suffer a prolonged disability, likely to be of an indefinite nature.  Therefore, they are not temporary in nature.  Based on this, the arbitrator ruled that Allstate was not allowed to reduce the non-earner benefits it had to pay, simply because Ms. Niforos was receiving CPP disability benefits.

The law set out in the Niforos case is helpful for people who are already disabled and receiving CPP disability benefits, yet are even more severely injured because of a car accident.  If this happens, the insurance company cannot refuse to pay or reduce the amount of your non earner benefit payments.