REASONS FOR DECISION

Before: Arbitrator Kenneth J. Conroy Heard: By written submissions completed on April 17, 2015 Appearances: Mr. David Carranza for Ms. Antoinette Nelson Mr. Jacob Lipsey for State Farm Mutual Automobile Insurance Company

Issues:

The Applicant, Ms. Antoinette Nelson, was injured in a motor vehicle accident on September 28, 2012 and sought accident benefits from State Farm Mutual Automobile Insurance Company (“State Farm”), payable under the Schedule.¹ The parties were unable to resolve their disputes through mediation, and Ms. Nelson, through her representative, applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act, R.S.O. 1990, c. I.8, as amended.

The issue in this Motion is:

Are the Applicant's Employment Insurance Maternity Benefits ("EI Maternity Benefits") deductible from Income Replacement Benefits ("IRBs") otherwise payable to the Applicant under the Statutory Accident Benefits Schedule ("SABS") pursuant to Regulation 34/10 under the Insurance Act, R.S.O. 1990, c. I.8?

Result:

The Insurer is entitled to deduct 70 percent of EI Maternity Benefits received by the Applicant during the same period that any IRBs are paid or found to be owing to the Applicant.

EVIDENCE AND ANALYSIS:

The facts are not in dispute relating to this case in that the parties agree that at the time of the accident, the Applicant was receiving EI Maternity Benefits.

The Applicant's position is that, although Subsection 7(3) of the Schedule provides for a 70 percent deduction of any gross employment income, including EI Maternity Benefits, from IRBs otherwise payable, other income replacement assistance under Subsection 4(1) of the Schedule does not include Employment Insurance Benefits and therefore, there is a conflict that must be decided in favour of the Applicant. The Insurer takes the position that the Applicant was, at all relevant times, employed after the accident, as she continued to receive EI Maternity Benefits.

The Insurer further submits that Subsection 7(3) of the Schedule clearly provides for a deduction from IRBs of 70 percent of any gross employment income received by the insured person as a result of being employed after the accident.

It must be noted that neither party submitted any case law with respect to the deductibility of EI Maternity Benefits from IRBs. In the case of the Applicant, the case law referred to in the index of the Factum does not appear to relate to the motion at hand, nor is there any reference to case law whatsoever in the body of the Factum itself.

I do not agree with the position put forth by the Applicant. I do not find that there is a conflict between gross employment income and other income replacement assistance. Gross employment income as defined by Subsection 4(1) of the Schedule provides for the inclusion of "any benefits received under the Employment Insurance Act (Canada)". Therefore, it would not be necessary or reasonable to include such benefits under "other income replacement assistance" as such benefits are specifically addressed under "Gross Employment Income". I conclude that the Insurer is entitled to deduct 70 percent of EI Maternity Benefits received by the Applicant during the same period that any IRBs are paid or found to be owing to the Applicant.

EXPENSES:

Neither party requested their expenses of this Motion. Accordingly, expenses of this Motion may be addressed at the Hearing of the application in the context of the entire case.

June 19, 2015

Kenneth J. Conroy Arbitrator

Date

Financial Services Commission of Ontario

Neutral Citation: 2015 ONFSCDRS 132 FSCO A14-000848

BETWEEN:

ANTOINETTE NELSON Applicant

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY Insurer

ARBITRATION ORDER

Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:

The Insurer is entitled to deduct 70 percent of EI Maternity Benefits received by the Applicant during the same period that any IRBs are paid or found to be owing to the Applicant.