Supplements to Compensation Policy 21-215 | Effective Date: January 1, 2020

Purpose

The purpose of this policy is to provide the Board of Directors’ interpretation of subsections 38.2(2.5) and 38.11(9) of the WC Act, based on the New Brunswick Court of Appeal decision J.D. Irving, Limited (Sussex Sawmill) v. Wayne Douthwright and Workplace Health, Safety and Compensation Commission.

Scope

This policy applies to workers who receive both compensation benefits and remuneration from an employment-related source.

This policy does not apply:

Statements

1.0 General

WorkSafeNB adjudicates all claims using Policy 21-100 Conditions for Entitlement – General Principles. Once a claim is accepted, WorkSafeNB provides a range of benefits to injured workers, as required. These benefits may include:

  • Loss of earnings benefits;
  • Lump sum impairment awards;
  • Medical aid; and
  • Rehabilitation services.

WorkSafeNB has a legal responsibility to determine an injured worker’s loss of earnings because of a workplace injury. When WorkSafeNB determines that an injured worker is experiencing a loss of earnings due to a temporary or permanent work restriction, WorkSafeNB pays loss of earnings benefits based on the following legislated formula:

Loss of earnings = average net earnings – net estimated capable earnings

The compensation payable for new accidents is 85% of loss of earnings. For more information, see Policy 21-210 Determining Average Earnings.

2.0 Reducing Compensation Benefits

Subsections 38.11(9) and 38.2(2.5) of the WC Act provide limits to the compensation that injured workers can receive. When injured workers receive remuneration from sources other than WorkSafeNB, loss of earnings benefits may be reduced.

WorkSafeNB reduces loss of earnings benefits when:

  • The remuneration is earned and received by the injured worker for the same period during which compensation is paid (with the exception of sick leave benefits as noted below);
  • The remuneration is from the employer or an employment-related source;
  • There is no requirement to reimburse the remuneration; and
  • The combination of benefits and remuneration exceeds 85% of pre-accident net earnings.

All four parts of this test must be satisfied to reduce benefits.

2.1 Specific Reductions in Benefits

WorkSafeNB shall deduct from compensation benefits:

  • Sick leave benefits (paid during the same period that compensation is paid, regardless of when the sick leave was earned);
  • Employment Insurance benefits; and
  • Employer-sponsored disability benefits (when there is no undertaking to reimburse the insurer).

3.0 When Not to Reduce Benefits

Remuneration received during the worker’s compensation period but earned prior to the compensation period shall not be deducted from loss of earning benefits. Examples include but are not limited to:

  • Vacation pay; and
  • Bonuses. 

3.1 Retirement Pensions & Income

Retirement pensions / income are not supplements to compensation under the Workers’ Compensation Act and are not used to reduce compensation benefits. However, if an injured worker is receiving a retirement pension or retirement type income from the accident employer, it may indicate that the employment relationship has been terminated, if so subsection 38.11(14) applies. Please see Policy 21-214 Determining Continued Eligibility for Loss of Earnings Benefits. Some examples of retirement pensions / income may include, but are not limited to:

  • A pension arising out of employment or service in any armed forces;
  • Canada Pension Plan retirement;
  • Quebec Pension Plan retirement;
  • United States Social Security;
  • Pensions paid by Veterans Affairs Canada;
  • Any provincial pension plan;
  • Registered Retirement Savings Plans, Registered Retirement Income Fund, or similar programs;
  • Retirement allowances; and/or
  • Other remuneration diverted into a program or plan for retirement.

 

Case Law

J.D. Irving, Limited (Sussex Sawmill) v. Wayne Douthwright and Workplace Health, Safety and Compensation Commission

The Court concluded that Canada Pension Plan retirement was not a supplement under the current legislation. Although not the subject of appeal, it was also indicated that the Court might not consider other types of retirement income, as defined by the Supreme Court of Canada in Clarke v. Clarke, a supplement to compensation.

Policy 21-100 Conditions for Entitlement – General Principles

Policy 21-210 Calculation of Benefits

Policy 21-230 Deduction of CPP Disability Benefits

 

 

Appeals Tribunal – means the Workers’ Compensation Appeals Tribunal established under the WHSCC & WCAT Act.

Average earnings - the daily, weekly, monthly, or regular remuneration that the worker was receiving at the time of the injury or recurrence of the injury, or receiving previously, or at the time of the loss of earnings, or at the time of death, as may appear to the Commission best to represent the earnings of the worker, unless the worker was at the date of the accident under twenty-one years of age and it is established to the satisfaction of the Commission that under normal conditions the earnings would probably increase, in which case this fact should be considered in determining the worker’s average earnings and in no case shall average earnings exceed the maximum annual earnings. (WC Act)

Average net earnings - the average earnings of the worker minus any income tax and premiums under the Employment Insurance Act and contributions under the Canada Pension Plan that would be payable by the worker based on those earnings. (WC Act)

Employer - (a) every person having in his service under contract of hire or apprenticeship, written or oral, express or implied, any worker engaged in any work in or about an industry, (b) a municipal corporation, commission, committee, body or other local authority established or exercising any powers or authority with respect to the affairs or purposes, including school purposes, of a municipality, (c) a person who authorizes or permits a learner to be in or about an industry for the purposes mentioned in the definition “learner”. (adapted from the WC Act)

Estimated capable earnings - earnings that the injured worker is estimated to be capable of earning, at a suitable occupation, after the injury or recurrence of injury. (adapted from the WC Act)

Loss of earnings - average net earnings minus the net earnings the worker is estimated to be capable of earning at a suitable occupation after sustaining the injury. (adapted from the WC Act)

Maximum annual earnings - an amount equal to 1.5 times the NBIAE, which is set by the Commission as of the first day of January of each year. (adapted from the WC Act

Net estimated capable earnings - estimated capable earnings minus any income tax and premiums under the Employment Insurance Act and contributions under the Canada Pension Plan that would be payable by the injured worker based on those earnings. (WC Act)

New Brunswick Industrial Aggregate Earnings (NBIAE) - the amount set by the Commission as of January 1st each year which is equal to $27,323 for the year 1993 and which is increased thereafter by the percentage increase in the Consumer Price Index for Canada for all items for the twelve month period ending the 30th day of June in each year as determined by the Commission in August of each year on the basis of monthly reports published in that respect by Statistics Canada for that period. (WC Act)

Pre-accident earnings - the daily, weekly, monthly or regular remuneration that the worker was receiving at the time of the injury or recurrence of the injury, as may appear to the Commission best to represent the earnings of the worker. (WC Act)

Pre-accident net earnings - the pre-accident earnings of the worker minus any income tax and premiums under the Employment Insurance Act and contributions under the Canada Pension Plan that would be payable by the worker based on those earnings. (WC Act)

Remuneration - all income, earnings, or money from an employment-related source.

Retirement pensions / income - the payments a person receives upon retirement under pre-determined legal and/or contractual terms. These pensions may be set up by employers, insurance companies, the government or other institutions such as employer associations or trade unions.

WorkSafeNB – means the Workplace Health, Safety and Compensation Commission or "the Commission" as defined by the WHSCC & WCAT Act.

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