Shareholder loans from a pre-accident business are not deductible as post-accident employment income from income replacement benefits.
The applicant was injured in a motor vehicle accident and received statutory accident benefits, including income replacement benefits.
The insurer sought to deduct 80 per cent of post-accident payments made to the applicant by his pre-accident business, arguing they were employment income disguised as a loan.
The arbitrator found that the payments were a genuine loan and that the applicant was not engaged in post-accident employment.
Furthermore, a shareholder benefit in the form of a loan is not considered employment income under the Schedule.
The insurer was precluded from deducting the payments from the applicant's income replacement benefits.
Kim (Danny) Thanh Tran v. TD Home and Auto Insurance Company, 2008 ONFSCDRS 6
