Introduction:
Section 267.8(1)2 of the Insurance Act requires that damages awarded for income loss or loss of earning capacity in a motor vehicle accident claim be reduced by certain collateral benefits. This includes payments received “in respect of the incident” for income loss or diminished earning capacity. In practice, this has raised an interesting (and very pandemic-specific) question:
Are CERB or CRB payments deductible from an award for Past Income Loss?
Discussion:
Recent Ontario case law makes it clear that the answer depends largely on “WHY” those benefits were received.
In the decision of Ferreira v. Hopper 2024 ONSC 5385, liability for the accident was admitted, and the only issue at trial was damages. The jury awarded the plaintiff $100,000 for past income loss. During the same period, the plaintiff received both CERB and CRB benefits. On a post-verdict motion, the court held that those payments were deductible under s. 267.8(1)2. In reaching this conclusion, the court placed significant weight on the plaintiff’s own evidence at trial. This is because at no point did the plaintiff suggest that his absence from work was related to COVID-19 or any factor other than the injuries he sustained in the accident. On that basis, the court found that the CERB and CRB payments effectively operated as income replacement for accident-related losses, meaning they were received “in respect of the incident.” The court also noted that deducting the benefits was consistent with the longstanding principle against double recovery, particularly since the jury had already been instructed not to account for collateral benefits when assessing damages.
However, nearly one year later, a different result was reached in Sampson et al. v. Hitchen, 2025 ONSC 6416. In that case, the court declined to deduct approximately $14,000 in CERB payments from the jury’s past income loss award. Justice MacNeil found that there was no evidence connecting the plaintiff’s receipt of CERB payments to the motor vehicle accident. Rather, CERB was considered to be a benefit triggered by COVID-19-related work disruptions, and the evidentiary record did not establish that the plaintiff received the payments due to any accident-related disabilities. As a result, the court concluded that the benefits were not received “in respect of the incident” for the purposes of s. 267.8(1)2.
Takeaways:
Taken together, these decisions confirm that CERB and CRB payments are not automatically deductible in personal injury actions. Courts will look closely at the reason the benefit was received and whether there is evidence linking it to accident-related income loss. Where the evidence supports that the payments functioned as income replacement due to an inability to work caused by accident injuries, they are more likely to be deducted. Where the payments are attributable to broader COVID-19-related circumstances, they will generally not be.
