Workers' Compensation Claim Benefits (7:XI)

A. Benefits

In a sense, BC has two Workers’ Compensation Systems that work in tandem. One system pertains to injuries which occurred before June 30, 2002 and the other to injuries which occurred on or after June 30, 2002. The following section will discuss injuries that occurred on or after June 30, 2002. If your client was injured prior to June 30, 2002, be aware that different rules apply. Refer to the Rehabilitation Services and Claims Manual for more information. Volume I of the Manual applies to most injuries that occurred prior to June 30, 2002, while Volume II applies to injuries that occurred on or after June 30, 2002.

B. Average Earnings

A key element of all benefit calculation is the worker’s “average earnings”, i.e. the amount of income the worker received over an appropriate period of time before the injury. This is calculated as 90 percent of the worker’s net (take home) pay. The Board must use the exact previous one-year earnings of the worker, with narrowly defined exceptions. Actual employment income is averaged over the whole preceding year. This can make it difficult for some workers to receive a fair benefit rate if they had irregular earnings prior to their injury.

If the worker received employment insurance (EI) benefits for part of the preceding year, these may be relevant to the calculation of benefits. Under s. 33(3.2) of the Amendment Act 2002, EI benefits are included in the calculation of the worker’s earnings for the year if the worker was, in the Board’s opinion, employed in “an occupation or industry that results in recurring seasonal or recurring temporary interruptions of work”.

WCB benefits are adjusted annually according to inflation, at a rate 1 percent less than the actual inflation rate. There is also 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.

It is also important to note that under s. 35.1(8) of the WCA, a recurrence of an injury is treated as a new injury for any new period of temporary disability. Thus, if a worker was injured before June 30, 2002, and then had a recurrence at some point after this date, the wage loss benefits would be paid at the newer rate for the new period of disability.

However, a “recurrence” must be distinguished from a “deterioration”. In Cowburn v Worker’s Compensation Board of British Columbia, 2006 BCSC 722, the court found that it was patently unreasonable to treat a deterioration in a worker’s disability as a recurrence of an injury. Accordingly, when a worker’s permanent disability that began before June 30, 2002 becomes worse, the increased benefits are based on the older provisions that were in force when the disability first arose.

C. Short Term and Long Term Wage Rates

During the “initial payment period”, the first 10 weeks of compensation, the wage loss rate is determined by looking at what the employee was actually earning at the time of the injury.The Board does not consider the worker’s actual income tax, EI or CPP deductions in determining benefits in the first 10 weeks of the claim. Instead, benefits for all workers are based on 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. For single workers, this results in benefits during that period of only 90 percent of the worker’s take home pay. Workers who have several dependants and hence much lower actual tax deductions, who would otherwise be entitled to a higher level of benefits, are instead assessed the same way as single workers.

The Act allows the Board to determine average earnings differently if a worker’s pattern of employment at the time of injury was “casual in nature”. Where this is found to be the case, the worker’s earnings over the immediately preceding 12 months of employment are considered a more accurate reflection of the lost wages. Consequently, the average earnings calculated at the outset of the claim will be the same as those calculated as long-term earnings later in the process. Practice Directive #C9-9 describes a two-step investigation procedure to determine whether a worker's pattern of employment is casual in nature. This can be found on the WorkSafeBC website under the “Regulation and Policy” heading, “Practices” subheading, “Rehabilitation and Compensation Services” link. 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 employee 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). The result is that a “casual worker”, who may have been earning a good wage at the time of the accident, is likely to be eligible for less compensation during the initial payment period than his or her counterpart in a “permanent” job.

The Board reviews the wage rate after 10 weeks of benefits, and recalculates a long-term wage rate. The process of calculating long-term wage rates is far more rigid than it was under the previous system. Section 33.1 of the Act sets the immediate preceding one year earnings as the default time span with which to calculate the long-term wage rate, with few exceptions. The wage rate is the basis for all temporary, permanent and rehabilitation benefits that are paid under the claim, and as a result the Board has far less authority to establish a fair rate that truly reflects the worker’s lost earnings.

For example, a worker who earned $3000 per month take-home pay at the date of the injury may have been laid off for six months of the previous year due to local economic conditions. If the worker is in what the WCB considers a “highly seasonal” occupation, any EI benefits the worker received while laid off would add to the earnings; otherwise, only the wages the worker received during the six months of actual employment would count. The Board is required to divide this income over 12 months, so the worker’s average earnings would be reduced to $1500 per month and the benefits would be based on 90 percent of that amount, or $1350 if the worker is totally disabled.

The Act does allow the Board to determine average earnings differently in “exceptional” circumstances if the one-year average would be “inequitable” (s. 33.4). This provision does not apply in the case of “casual” workers (in which case the 12 month average is rigidly applied) or “permanent” workers who have been employed for less than 12 months (in which case s. 33.3 is used). See Practice Directive #C9-12; an exceptional case has been interpreted to mean one that is “truly extraordinary”, “unusual”, or “irregular”, such that “the worker’s circumstances in the year prior to the injury fail to provide any meaningful measure of their employment history”. Examples might include a non-compensable illness or injury, or maternity/paternity obligations. To arrive at the long-term average earnings figure that better reflects the worker’s loss of earnings, officers may: i) exclude a significant atypical disruption (i.e. one lasting more than six weeks) from the calculation of the worker’s long-term average earnings; and/or ii) base the worker’s long-term average earnings on a longer period of time (e.g. 24 months) or on a shorter period of time.

In the case of a worker who has been working, on a “permanent” basis, less than 12 months for the pre-accident employer, section 33.3 of the WCA allows earnings to be calculated based on what a person of similar status employed in the same type and classification of employment would earn in 12 months. Section 33.3 is not applicable where the employment is determined to be temporary.

D. Temporary Wage Loss Benefits (TWL)

The WCA does not define “disability” although it uses this term throughout the Act. Section 29(1) of the Act states that if a worker has a temporary total disability (TTD), the Board must pay full TWL benefits (calculated as above), also referred to as “s. 29 benefits”. Section 30 states that if a worker has a temporary partial disability (TPD), the Board must pay the difference between the worker’s average net earnings before the injury and either their average net earnings after the injury OR the average net earnings in some deemed “suitable” occupation. These are referred to as “s. 30 benefits”.

If a worker has an injury but can perform the full duties of the pre-injury job, the claim is accepted for health care benefits only (see below). If the injury is such that the worker cannot perform full duties, the Board makes an entitlement decision on an accepted claim regarding additional benefits, especially wage loss (#34.10). For most claims, the Board finds that there is some type of temporary disability:

TTD - worker not working at all: TWL paid under s. 29 of the Act;

TPD – worker working part-time work at a suitable occupation or deemed suitable occupation and paid Partial Wage Loss (PWL) under s. 30 of the Act; OR

Temporary Disability (of any kind) but the employer gives the worker given suitable light duties a as per policy #34.11. In this case, the Board usually does not pay the worker any TWL but the worker’s other benefit entitlement (such as health care) is adjudicated under s. 30 of the Act. Policy #34.11 applies to any adjudication of these light duties, including where the worker refuses light duties on the grounds that they are unreasonable.

NOTE: Light duties is meant to be a temporary arrangement during a period of temporary disability. Even though no TWL is paid to a worker, it is still an accepted period of “disability” under the Act. During this period, a worker is entitled not only to health care benefits but also to a decision regarding the outcome of the accepted condition. All periods of “light duty” should conclude with a formal “resolve” or “plateau” decision (see below).

A temporary disability ceases when the worker’s medical condition either resolves entirely or is not expected to change significantly in the next 12 months. At this point, the medical condition is said to have “plateaued” and is considered permanent. In either case, the Board ceases to pay further TWL under s. 29 or s. 30 at this point.

E. Health Care Benefits

Health care benefits are payable under s. 21 of the Act for the period of the worker’s disability, and thereafter to “cure and relieve from the effects of the injury or alleviate those effects”. Chapter 10 of the RSCM II greatly expands the Board’s regulation and control of particular health care benefits including all forms of treatment, medical investigation with specialists, medical aids and medications. As noted above, if a worker has an impairment but can perform their full pre-injury job, the claim is accepted for health care benefits only (as long as there is a short episode of disability: policy #34.10).

There is now a general Board practice to not provide injured workers with medical treatment (such as physiotherapy or counselling) past the “resolve/plateau” point. This may be an issue for workers who are able to RTW with permanent injuries, especially in accommodated positions. Such worker may be suffering from the effects of their injury but are not considered “disabled”. Likely they are entitled to on-going treatment under s. 21 of the Act but it may require an appeal to obtain such benefits.

The Board must pay for necessary medical treatment, including physicians and hospital bills, physiotherapy, drugs, artificial limbs, hearing aids, and special transportation. Allowances for personal care and for structural alterations to the home may also be paid to paraplegics and other severely disabled workers.

The Board has the right to supervise a worker’s treatment (s. 21) and to authorize any surgery. If a worker decides to undergo surgery or other treatment that is not authorized by the Board, the costs may not be paid, and if the injury is worsened by the treatment, benefits may be cut off or reduced. The Board usually agrees to pay for surgery recommended by the worker’s own doctor, but the doctor should ask for the Board Advisor’s approval. The Board often refuses to pay for drugs or physiotherapy considered unnecessary by its advisors. Notwithstanding the 75-day rule, the Board now agrees that each Medical Aid decision can be appealed.

F. Income Continuity Benefits

Although classified as rehabilitation benefits (described below), income continuity benefits are payments to provide interim support for the worker after TWL is terminated at plateau but before the amount of a permanent disability pension is determined. A worker’s advocate should always request these benefits as they are often the only source of income that a worker will have between the time the worker’s condition stabilizes and the time the pension benefits are assessed. These are short-term, temporary benefits.

If a worker refuses employment or to participate in a Board issued VR plan, he or she may be refused income-continuity benefits. See Policy C11-89.10 of the RCSM for more information regarding the assessment of income continuity benefits.

G. Vocational Rehabilitation Benefits

Rehabilitation benefits are discretionary benefits under s. 16 of the Act and which can include:

• monthly compensation (in the same amount as wage loss benefits) to support a worker during a rehabilitation program;
• payment of tuition, books, and other costs of the course itself;
• a job search allowance (also in the same amount as wage loss benefits) to support the worker while looking for suitable employment if he or she cannot return to the pre-injury job; and
• a training on the job allowance or wage subsidy to encourage an employer to allow the worker to learn new employment skills, or gain experience in a new field.

Whenever a worker is unable to return safely to his or her old occupation, an advocate should request a referral to a WCB vocational rehabilitation consultant (VRC).

Policies C11-85.00 to 91.00 of the RCSM set out the five phases of vocational rehabilitation. The VRC will work through these phases sequentially with the worker.

Phase One: A WCB Vocational Rehabilitation Consultant will make an effort to assist the worker to return to the same job with the same employer (the “accident employer”).

Phase Two: If the worker cannot return to the same job, the Board consultant works with the accident employer to make worksite accommodations and job modification, or to provide alternative in-service placement, with a view to finding the worker a new position within the accident employer’s business.

Phase Three: If the employer is unable or unwilling to accommodate the worker, the consultant identifies suitable occupational options in the same or related industry.

Phase Four: If the worker is unable to return to employment in the same or related industry, the consultant explores opportunities in all industries, with emphasis placed on the worker’s transferable skills, aptitudes and interests.

Phase Five: If the existing skills are insufficient, the consultant uses training programs to help the worker acquire new skills. The consultant also assists the worker to secure employment once training is complete.

A worker may receive retraining if they are unable to return to the previous job, if the previous job is a risk to the worker’s health, or if the previous job would put the worker at a long-term disadvantage. In fatal cases, a surviving spouse may be eligible for retraining.

In practice, the Board will only issue one VR plan and ask the worker to agree to it. The plan must be reasonable. If the worker thinks a VR plan is not reasonable, they should appeal the plan and ask for a new plan, being as specific as possible as to why the VR plan is unreasonable, and if possible, what a reasonable VR plan may be.

If a worker is cooperating with VR re-training, they should continue to receive benefits at the full wage loss rate. If a worker is appealing a VR plan as unreasonable, the worker may wish to keep cooperating with the challenged VR plan during the appeal period in order to continue receiving benefits. If the benefits are cut but the worker thinks they are cooperating, an appeal should be filed.

Rehabilitation decisions can be reviewed only by the WCB’s Review Division; the RD decisions on VR cannot be appealed to the Workers’ Compensation Appeal Tribunal.

Rehabilitation will usually be provided only as necessary to restore the worker to the same earning capacity as the long-term wage rates determined by the Board. This is another good reason to review the wage rate decision.

NOTE: The Board tends to assess permanent disability in terms of impairment and to limit its assessment of impairment to “medical restrictions and limitations” (R&Ls) i.e. specific activities which the worker cannot do or should not do at all because of potential harm. R&Ls may or may not include other aspects of limited ability such as tolerance or endurance. Often tolerance or endurance (such as an inability to sit for more than 10 minutes) constitute key elements of work disability but will not be flagged as R&Ls; this can cause problems in VR. VR benefits have been drastically cut since 2002 because of changes to the Board’s policies and practice, although the key provision of the Act, s. 16, has not been changed. The annual expenditures on VR are now a small fraction of what they were in 2001. Notwithstanding this and the R&L designation, case law is clear that VR must address the whole worker, including any pre-existing disabilities or barriers to employment in considering an appropriate VR plan.

H. Permanent Disability Pensions

Once a worker’s condition has stabilized or “plateaued”, i.e. is not likely to get significantly better or worse, temporary wage loss benefits will cease. If the worker continues to have some disabilty, they will be assessed for a permanent disability pension. A disability pension is possible if WCB determines that the worker has been left with a permanent disability.

A case manager will determine which conditions or injuries are permanent and refer the worker for assessment. Decisions not to refer a worker at all or to exclude certain injuries or conditions are appealable to the Review Division and, if necessary, WCAT.

A WCB “pension” is how the Board compensates an injured worker for a permanent disability. There are two possible methods for calculating a pension – compensation for permanent functional impairment (PFI) or compensation for loss of earnings (LOE).

All permanent disability pensions are paid until age 65, unless if the worker can convince the WCB otherwise (discussed in detail below).

NOTE: Workers who also qualify for Canadian Pension Plan (CPP) disability benefits will have one-half of those benefits deducted from their WCB pensions (this could amount to as much as $577 per month, half of the $1153 maximum currently payable by CPP). This deduction represents the employer’s share of the benefits paid for the same disability as the WCB claim. If a CPP pension is partly based on non-compensable disabilities, no deduction will be made for that portion of the CPP.

1. Loss of Function Method

The first calculation for permanent partial disability pensions (called “Permanent Functional Impairment”) compares the worker’s degree of physical impairment to that of a totally disabled person. The percentage of impairment is usually based on the RSCM’s Permanent Disability Evaluation Schedule (PDES).

Generally, only disabilities that could reduce earning capacity receive compensation, and there are no payments for pain and suffering or loss of enjoyment of life. The Board’s policy manual contains detailed schedules of percentage disability for different types of disabilities. Types not listed are estimated, and there is usually some degree of discretion in the process.

Policy item #39.10 says that the PDES is meant to be a guideline and not a rigid formula. The WCB is free to apply other variables in arriving at a final award, but they must relate to degree of impairment and not social or economic factors, or rules established in other jurisdictions. In practice, the PDES is applied with little discretion.

Note that loss of function awards for chronic pain are capped at 2.5% per area of pain.

2. Projected Loss of Earnings Method

This second calculation for permanent partial disability pensions compares the long-term wage rate that a worker was able to earn per year before the injury to what the worker is able to earn after the injury, based on occupations that are suitable for and reasonably available to that worker.

Loss of earnings pensions will only be paid where the amount determined under the loss of function method would leave the worker with a significant loss of earnings, i.e. where the disability resulting from the work injury makes it unlikely that a worker can continue in the occupation at the time of injury or adapt to another suitable occupation without incurring a significant loss of earnings (See WCA s 23(3.1) and Item #40.00 in the RSCM). Practice Directive #C6-2 further defines “significant loss of earnings”. A 25% or greater percentage differential between pre-injury and post-injury earnings is usually considered significant. A 5% or less percentage differential is not considered significant. Anything in between could be considered significant, depending on the individual circumstances of the case. Note that the Practice Directive is not binding law, but is still persuasive.

Where workers are unable to replace their pre-injury earnings, the WCB often “deems” them capable of earning significantly more post-injury than they actually are earning or can earn following an injury. For example, a worker who cannot return to a pre-injury job that paid $4000 per month may find new employment for $2000 per month. Instead of accepting the worker’s own experience, the Board may decide that over the long term the worker can find a different kind of job that pays $3000 per month, and calculate the benefits accordingly. Instead of getting a loss of earnings pension representing the actual $2000 per month the worker is losing, he or she would receive a pension based on the $1000 the Board “deems” him or her to be losing. Common problems workers face in these situations are that the Board may underestimate the actual extent of physical or psychological limitations they have due to their injury and/or pre-injury background, underestimate the demands of the deemed occupations the Board says they can perform, and/or overestimate what they are actually capable of earning over the long term in the deemed occupations, therein deeming them capable of theoretical earnings that far exceed what is reasonably suitable for and available to

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