Difference between revisions of "Workers' Compensation Claim Benefits (7:XI)"

When a compensation claim is accepted, the Board sets the worker’s wage rate at two different points in the claims process.  All claims benefits (e.g. LOE, PFI, TWL) are paid according to these rates. If you or your client believe your benefits do accurately reflect your income before your injury, it is vital that you try to correct this as soon as possible.

At the beginning of the claim, the Board sets a short-term wage rate (STWR).  After 10 weeks, if the worker is still on benefits, the Board sets a long-term wage rate (LTWR).  Both the STWR and LTWR are set at 90% of net earnings but the calculation of these earnings are different (in most cases) for the two wage rates.   

Except for “casual workers” (see below), a worker’s STWR is based on his gross earnings at the time of the injury with deductions assumed to be 1.5 times the basic personal deduction allowed under the Income Tax Act, RSC 1985, c 1 (5th Supp.) for a single taxpayer, plus the standard EI and CPP contributions.  This results in a STWR that equates to 90 percent of the worker’s take home pay for a single worker.  For workers who have several dependants or much lower actual tax deductions, this calculation results in a lower wage rate than if the Board had used actual figures.  However, because the STWR is only set for the first 10 weeks of the claim and generally reflects their current wages, many workers do not dispute this issue or appeal the STWR decision.  

The determination of a STWR for “casual workers” is different.  The WCA requires that where WCB determines that a worker’s pattern of employment at the time of injury was “casual in nature”, that the STWR be based on that worker’s earnings over the immediately preceding 12 months of employment.  The result is that a “casual worker” who is earning a good wage at the time of the accident will likely be eligible for less compensation during the initial payment period than his or her counterpart in a “permanent” job.  Where the “casual worker” designation has been made in the STWR decision but is not correct, this may be an important appeal issue.  

:'''NOTE:''' Practice Directive #C9-9 currently describes a two-step investigation procedure to determine whether a worker's pattern of employment is casual in nature.  If the job at the time of injury is scheduled to last for three months or longer, the worker will not be considered a casual worker. If the job is scheduled to last for less than three months, the worker may be considered a casual worker if he or she has a history of short term jobs (less than three months in length) with significant absences from employment between them (greater than the time spent employed).  However, as PDs are updated and changed on a regular basis, the electronic version should be consulted.

The LTWR is based on a calculation of a worker’s “average earnings” in the previous year and the worker’s actual deductions.  A worker’s “average earnings” is a somewhat complex and careful calculation, subject to changing law and policy.

:'''NOTE:''' Chapter 9 of the RSCM II is entirely on “Average Earnings” and there are about 10 Practice Directives on these calculations.  Rather than summarize this complexity, it is best to recognize that the Board’s LTWR decision is based on an “average earnings” decision and that the “average earnings” decision is important to review on its particular facts.

Once the LTWR is set, the Board uses this LTWR figure to calculate the amount of any awarded WCB benefits, including pensions, on that worker’s claim, for the life of the claim, except in the case of “re-openings” (see below).   

Finally, for ongoing benefits, such as pensions,   while the initial amount is determined on the basis of the LTWR, the benefit itself is adjusted annually according to inflation, at a rate 1 percent less than the actual inflation rate with a 4 percent cap on inflation adjustments, regardless of whether the actual inflation rate is higher. This applies to all workers, including those injured before June 30, 2002.   

Under s. 35.1(8) of the current Act, a '''recurrence''' of an injury is treated as a new injury for any new period of temporary disability.  In addition, if the re-opening is more than 3 years after the initial injury, the Board may reset the LTWR for the purpose of calculating additional benefits under the re-opening.

The applicable policy on re-setting LTWR for re-openings over 3 years is Policy #70.20.  This policy is complex and it is best to consult this policy in light of the particular facts of each case.  This policy affects all workers with long-term disabilities, where their condition recurs or deteriorates.  

The re-opening provisions also have particular significance if the worker was injured prior to June 30, 2002, where the LTWR was calculated as 75% of gross and the definition of “average earnings” was different.  For this worker, his re-opening TWL benefits would be calculated under the new policy provisions (90% of net average earnings).