Insured receives maximum non earner benefit where pre car accident job does not reflect education or training.

June 08, 2011, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

Arbitrator: Susan Sapin          
Decision Date: November 1, 2010

Nature of the Appeal
Ms. Taryn Henry was catastrophically injured in a motor vehicle accident on April 28, 2007, a few weeks short of her twenty-first birthday. Because Ms. Henry worked part time before the accident, Pembridge Insurance Company determined she was entitled to a statutory IRB of $105.72 per week under the Schedule. Ms. Henry claims she is entitled to the higher non-earner benefit ("NEB") of $185 per week from six months after the accident up to 104 weeks, and then $320 per week thereafter under the Schedule.
  1. Is Ms. Henry entitled to a non-earner benefit of $185 per week from October 27, 2007 to April 28, 2009 and then $320 per week thereafter?
  2. Is Ms. Henry entitled to a special award?

To qualify for NEB under the Schedule Ms. Henry was required to establish three things:
1.       She suffered a complete inability to carry on a normal life as a result of the accident;
2.       She had "completed her education" less than one year before the accident;
3.       She was not employed in a job that "did reflect her education and training." 
The parties agreed that Ms. Henry suffered a complete inability to carry on a normal life as a result of the accident meeting the first requirement. Her impairments included paraplegia, requiring the use of a motorized wheelchair; impaired function of her left hand; and some memory and executive process deficits due to traumatic brain injury.

The dispute was whether Ms. Henry had completed her education less than one year before the accident and whether her part-time job serving meals in the dining room of a senior's home reflected her high school education and training, within the meaning of the Schedule.
According to the Agreed Statement of Facts Ms. Henry left Secondary School in June 2005, one credit shy of that required to graduate. In January 2006, she enrolled in an alternative high school where she completed her remaining credit. She graduated with an Ontario Secondary School Diploma on August 31, 2006 – less than one year before the accident.

From September 4, 2006 until the accident on April 28, 2007, Ms. Henry worked part-time at a senior's residence, earning minimum wage to set the dining room, serve meals, and clean up. The uncontested evidence of Ms. Henry and her mother, was that Ms. Henry intended to go to college in September 2007. 
The key issues to be determined in the hearing are provided in s.12.(1) 3 i and ii.
The Statutory Accident Benefit legislation provides that:
12.  (1)  The insurer shall pay an insured person who sustains an impairment as a result of an accident a non-earner benefit if the insured person meets any of the following qualifications:
3. The insured person suffers a complete inability to carry on a normal life as a result of and within 104 weeks after the accident and,
i. was enrolled on a full-time basis in elementary, secondary or post-secondary education at the time of the accident, or
ii. completed his or her education less than one year before the accident and was not employed, after completing his or her education and before the accident, in an employment that reflected his or her education and training. O. Reg. 403/96, s. 12 (1).
(2)  Subject to subsection (3), the amount of the non-earner benefit shall be $185 for each week that the insured person is eligible to receive the benefit. O. Reg. 403/96, s. 12 (2).
(3)  If a person qualifies for a non-earner benefit under paragraph 3 of subsection (1) and more than 104 weeks have elapsed since the onset of the disability, the amount of the non-earner benefit shall be $320 for each week that the insured person continues to be eligible to receive the benefit.

Did Ms. Henry complete her education within one year of the accident?
Pembridge contends the uncontested facts of this case are that Ms. Henry intended to continue her education by going to college in September 2007. She had not "completed her education" within the meaning of the Schedule.

Ms. Henry submitted that at the time of the accident she had "completed her education" because she had "completed," high school, as evidenced by her diploma.

Both parties relied on the arbitration and appeal decisions in Kernaghan and AXA Insurance (Canada) to support their positions. The facts in that case are very similar to Ms. Henry's. Mr. Kernaghan, 19 years old, had finished high school, planned to go to college, and had taken a number of unskilled minimum-wage jobs in the meantime. At the time he was catastrophically injured, he was working as a turkey catcher. Arbitrator Murray held Mr. Kernaghan had "completed his education" and was entitled to the non-earner benefit.
Arbitrator Murray based her reasoning "that the break in Mr. Kernaghan's education was sufficient to conclude that he completed his education".  Mr. Kernaghan's plans to go to college were ambiguous, too speculative to rely on, (he had not saved enough money, applied or enrolled), and a "couple years away".  She concluded, “Mr. Kernaghan completed his grade 12 education within one year of the car accident." This decision was upheld on appeal.
On the issue of whether Mr. Kernaghan had completed his education within one year of the accident, the Director's Delegate found the parties conceded the point, and that in any event, Arbitrator Murray's finding was one of fact and did not involve a question of law. There was no such agreement between parties in Ms. Murray’s case.

In Ms. Murray’s case the arbitrator agreed that whether a person's plans to continue education are speculative or concrete is a question of fact. It is one element to consider in determining whether education is "completed". However, Ms. Henry wished to have the question of the meaning of the term "completed his or her education" in the context of the Schedule addressed. This raises not just a question of fact, but one of interpretation.

Pembridge maintains that "education" in the Schedule means education in its broadest sense. It is not "completed" if one has plans to continue it. Ms. Henry, on the other hand, submits the meaning is more specific. To "complete" one's "education" means to complete a particular stage of one's education – such as high school, for example. In her decision in Kernaghan, Arbitrator Murray appears to have used both meanings interchangeably, without any analysis. This raises the question of ambiguity that was not addressed either in her decision or in the appeal. 

Both the general and specific interpretations suggested are of course possible. The Concise Oxford Dictionary defines education as "1. The act or process of educating or being educated; systemic instruction. 2. a particular kind of or stage in education . . ." Webster's New Collegiate Dictionary defines the term as: "the action or process of being educated; also: a stage of such a process." 

Ms. Henry's more specific interpretation makes the most sense in the context of subparagraphs 12(1)(3)(i) and (ii) of the Schedule. It is consistent both with the actual wording used in (i) and (ii), and is consistent with the purpose of the section which, as recognized in the appeal of  Kernaghan, is to "avoid locking an insured into a minimal IRB or NEB payment when one has the misfortune of not only being in a motor vehicle accident but also having an accident at a point in one's life when limited work experience may give one limited marketability" In this case, after finishing high school and before having the opportunity to establish oneself in the workforce.

Subparagraphs 12(1)(3)(i)(ii) require payment of a NEB to injured insureds where a person is enrolled in education at the time of the accident, or is "underemployed" at the time of the accident, but within one year after "completing" their education:
The arbitrator determined that by identifying three distinct, common and well-known stages of education in the Act (elementary, secondary, and post-secondary), the  legislature intended to restrict the meaning of "education" in section 12 to those stages, and the term must mean a particular stage of a person's education. One is either enrolled in one of the three stages listed, or has completed it and is working in the year following completion. 

This interpretation was based on a plain reading of the Schedule and is consistent with the common understanding that education is completed in stages. Formal recognition of completion, (certificates, diplomas or degrees) is required before moving on from one stage to the next. The arbitrator found it fair to say one has not "completed" high school, college, university, or even apprenticeship or other formal training in certain occupations or trades, until one has obtained the requisite "paper qualifications".
Formal qualifications serve two purposes at least – they both permit access to further education or specific occupations, and serve to recognize and certify certain levels of accomplishment, and potential, for employers in general. One's completed level of education is a factor that may well define the type of employment one can expect to obtain. 

In Ms. Henry's case, she testified and understood she was not eligible for college until she obtained her high school diploma. She "completed" her high school education once she was granted her diploma.
The arbitrator explored in great depth both the dictionary definitions of “education” and “training” along with the contexts of their use in the relevant sections of the Schedule. The arbitrator determined that the inclusion of "training," in subparagraph (ii) supports the argument that the term "education" in subparagraph (i) refers only to the three levels of formal education named, and not education in a broad or general sense.

The use of "training" together with "education" widens the scope of entitlement to NEBs to include not only insureds enrolled in a stage of formal education interrupted by an accident, but to recent graduates who may have acquired other skills or qualifications outside of formal education, and who find themselves "underemployed" in the year between completing their education and before the accident.

Restricting "education" to a particular stage of education, as opposed to "education" in general, gives effect to the intent of the Schedule which is to compensate insured persons whose earning potential has been cut short by an accident.
In the first situation, a specific stage of full-time education, not "education" in general. It is ongoing, underway, or "incomplete" at the time it is interrupted by an accident. In the second situation, the insured person has completed a stage of education – high school, in the case of Ms. Henry. She or he has possibly acquired some additional training and is working in the year before the accident; but his or her job does not reflect his or her "education or training" up to that point. 

This interpretation puts underemployed students who graduated up to a year before the accident on even footing for entitlement to NEBs, with students enrolled full time when the accident occurred. The two provisions are different, but consistent. This interpretation accords with the purpose of subparagraph (ii) as articulated by Directors' Delegate Blackman in the Kernaghan appeal:
“that those who have recently graduated will not forever engage in the activities of students, that "eventually" they will get jobs "commensurate” with their education . . . recognizing there is potential for higher earnings for an insured person and that it would be unfair to lock an insured person into his or her economic circumstances shortly after completing one's education. Accordingly, a modest supplemental increase in weekly benefits is allowed, and only after a two-year waiting period”.
Regardless of interpretation of the meaning of "education", Ms. Henry's plans were not concrete enough to support the conclusion that she had not completed her education after high school. As a question of fact the arbitrator found Ms. Henry's plans to attend college in September 2007 were too speculative to conclude she could, or would, have enrolled in a college programme that year.
The arbitrator accepted her testimony and that of her parents that they were insistent that she go to college and that they would help her financially. However, although Ms. Henry sent away for applications, she had not applied to college. Ms. Henry also had saved very little money, and had not determined whether to live at home, or on campus. The arbitrator found her plans were very much "up in the air" at the time of the accident and that she was not ready to begin a college programme that September.

Was Ms. Henry employed in an employment that reflected her education and training?

Pembridge submitted Ms. Henry qualified for an IRB and not an NEB because her job at the senior's residence reflected her "basic" high school education and training, and was the type of job a high school graduate with such a "basic education" could expect to obtain. Ms. Henry argued her job did not reflect or require a high school education or diploma. 

The arbitrator agreed with Ms. Henry. 

As set out in the appeal decision in Kernaghan, the test an insurer must apply in determining whether Ms. Henry qualifies for an NEB under section 12, is whether her job was commensurate with her education and training. This requires comparing the actual requirements of Ms. Henry's employment to her education and training, to determine whether or not she was "underemployed." 

Pembridge's adjuster Ms. G provided two reasons
  1. Ms. Henry's part time job at the senior's residence reflected her education and training. Firstly there was no evidence to indicate Ms. Henry had anything more than a 'basic' high school education.  There was nothing in Ms. Henry's school records indicated any particular emphasis or direction.
  2. Where Ms. Henry lived neither she, nor any other high school graduate, presumably, could find a job paying more than a minimal wage with only a basic high school education and no specialization. Ms. G testified she did not herself have any particular training or qualifications from which to base an opinion about what employment might be commensurate with a high school education.

The arbitrator found Ms. B was wrong in her opinion because she misunderstood the test for entitlement to NEBs and did not consider or apply the correct facts. Implied on a plain reading of the Schedule, the test for NEB does not include a question of marketability, a criteria neither explicit nor and one which was specifically rejected by the Director's Delegate in Kernaghan. What the test does require, is a comparison of Ms. Henry's actual job duties, with her high school education, to determine if they are commensurate. 

The facts before arbitrator indicated they were not. Ms. Henry's employer, confirmed without dispute, that "we don't require a high school diploma to wash and serve." Ms. Henry's job required very little education and minimal skill. The employer described the job in two words — "serving - cleaning." Ms. Henry described the job as setting the dining room, serving the seniors, plating and decorating the desserts, clearing the tables, and cleaning. It paid minimum wage and there were no benefits. Ms. Henry and her mother testimony was accepted, that the work was irregular, almost casual, with split shifts around meals and an irregular schedule that could change at short notice. It was not uncommon for her to work only one day a week, although sometimes she worked more. The arbitrator found the work was both casual and menial. 

The arbitrator found Ms. Henry to be credible. She was lively and engaging with an outgoing personality. She was smart, funny and direct. He accepted her evidence that she liked the seniors, and that she had hoped the job would lead to something more in terms of permanent status and opportunity for advancement. She was disappointed to learn it would not. The arbitrator found the only aspect of the job that reflected Ms. Henry's background was her ability to enjoy interacting with the seniors. This was due solely to her outgoing personality; and, possibly, to her previous experience as a Girl Guide — experience that hardly qualifies as "training." These two aspects of her skill set had nothing to do with her high school education.

Ms. G testified reading a case manager's report of an interview with Ms. Henry in which she had expressed an interest in working with seniors. This was a factor Ms.G took into account in determining whether Ms. Henry's job at the senior's centre reflected her education and training.
The arbitrator found Ms. G should not have considered this factor. It was irrelevant, as interest or motivation are not factors included in the test set out in the Schedule.. The test focuses on two factors only, education and training, and whether these are reflected in a person's employment. There is no evidence of any course work even remotely related to serving meals to seniors in Ms. Henry's high school records.
The arbitrator also accepted Ms. Henry's testimony that the information in the case manager's report was wrong. She maintained she never told the case manager she was interested in working with seniors. Rather, the case manager asked her what she was doing at the time of the accident, and, wrongly, inferred a career preference from that information. The arbitrator preferred Ms. Henry's direct evidence over Ms. G's second-hand assumption. He found Ms. Henry's unskilled, casual, and menial work at the time of the accident did not reflect her high school education or training. 

Although Ms. G did not consult a vocational expert on the question of whether Ms. Henry's job reflected her education, Ms. Henry did. In a report prepared on her behalf on August 27, 2010, Dr. A, a Registered Rehabilitation Professional working in the capacities of Vocational Evaluation Specialist and Earning Capacity Analyst, concluded that Ms. Henry's job in the dining room of the senior's home was not employment which reflected her education and training.

The arbitrator agreed with Mr. A's conclusion and the analysis on which he based it. Ms. Henry's high school records indicated she was a very good student in grades 9 and 10, less so in certain subjects in grades 11 and 12, where, she admitted, "things went off the rails." Nevertheless she did consistently well in courses related to Information Technology, Communication Technology and Health and was praised by a number of teachers for her ability to produce excellent work and her creativity. She had decent marks in math, excelling particularly in "Mathematics for Personal Finance," which, together with her mother's testimony about her daughter's frugality, indicated a very practical side to Ms. Henry's nature.
She was an above-average English student. Mr. A noted that throughout high school Ms. Henry consistently had good to excellent learning skills. The arbitrator found Mr. A’s conclusion that Ms. Henry had a good working knowledge of possible careers available to her because she did well in her Grade 10 Career Studies course, to be reasonable and relevant.
The arbitrator found that Ms. Henry's high school education and training qualified her for a better job, a fact of which she herself would have been aware. Furthermore, Mr. A's examined Statistics Canada data and Ms. Henry was not earning even close to the average wage of a high school dropout or high school graduate. The arbitrator found Ms. Henry had a potential to earn more than a minimal wage. Although the Statistics Canada evidence used by Mr. A may have been somewhat out-dated, it was an objective and reliable factor to consider in determining whether Ms. Henry's job was commensurate with her status as a high school graduate, as compared to Ms. G's uninformed view about what a high school graduate could expect in terms of work and wages.
The arbitrator found the fact Ms. Henry was earning below her potential in the year before the accident put her squarely in the class of insured persons that subparagraph 12 (1)3(ii) is intended to benefit, for the reasons outlined by Brockenshire, J. and adopted by the Director's Delegate in Kernaghan.

Ms. Henry's school records and the particular knowledge gained and strengths revealed and her testimony persuaded the arbitrator that her minimally skilled and paid part-time job at the senior's centre did not reflect her education or training. 

Special Award: 

Under the Insurance Act, if an arbitrator finds that an insurer has unreasonably withheld or delayed payments, the arbitrator can award a lump sum amount specified in the Act.
Ms. Henry maintained that Pembridge's refusal to pay her a NEB was unreasonable and merited a special award for two reasons.
  1. The insurance adjuster Ms. G did not provide Ms. Henry with an opportunity to elect which type of three weekly benefits available under the Schedule she wished to receive – income replacement, non-earner, or caregiver benefits – contrary to subsection 36(2) of the Schedule, which provides that where a person's application for accident benefits indicates she "may qualify" for more than one type of weekly benefit, the insurer must notify her that she must elect which benefit she wishes to receive. It is not disputed that Ms. G did not provide Ms. Henry with an "Election of Income Replacement, Non-Earner or Caregiver Benefit" form ("OCF-10") until February 2008, almost a year after the accident, and only at Mr. T’s insistence.
  2. Ms. Henry claims a special award is because she feels that Pembridge was intransigent and unreasonable in continuing to deny her a NEB.
The arbitrator did not find Pembridge's conduct merited a special award. On the Application for Accident Benefits form submitted to Pembridge on behalf of Ms. Henry, where an applicant is asked to describe his or her status at the time of the accident, indicated only that Ms. Henry was employed and working. The box stating "student or recent graduate" was not checked off. Ms. G explained that it was not evident from the application that Ms. Henry might be entitled to anything other than an IRB, or to an election for another weekly benefit. The arbitrator did not find this to be unreasonable. 

When Ms. G sent Ms. Henry the OCF-10 on February 21, 2008, after discussions with Mr. T, she also sent a letter carefully explaining the different weekly benefits, and confirmed her understanding, based on information originally provided that Ms. Henry was one credit short of her high school diploma at the time of the accident. She advised, "In order to establish your entitlement to the election between the income replacement benefit and non-earner benefit, we will require that supporting documentation regarding the status of your education at the time of the accident be provided along with the completed election form." The arbitrator found that up until February 2008, at least, Ms. G did not have enough information, or correct information, to appreciate that Ms. Henry might have been entitled to an NEB. 
Further correspondence indicated Ms. G was not convinced of the basis for Ms. Henry's NEB claim, even after Ms. Henry’s counsel, Mr. T, sent a copy of the appeal decision in Kernaghan on March 11, 2008. By the time Ms. G wrote back to Mr. T on June 17, 2008, she knew Ms. Henry had gotten her high school diploma within a year of the accident, she had a copy of Ms. Henry's high school transcript and she had reviewed the Kernaghan decision. However, Ms. G requested further information ". . . as to how Ms. Henry's situation is similar to the case of Kernaghan," who had a "basic secondary school education with an emphasis in art." Ms. G's letter advised that, "Upon receipt of the above noted information further consideration will be given to the election between income replacement and non-earner benefits."
The arbitrator did not find Ms. G's position to be unreasonable under the circumstances. The eligibility test for NEBs is open to interpretation. The arbitration and appeal decisions in Kernaghan clarify the law but not to the extent that one could simply extract from them a set of reliable principles that could easily be applied to the facts in any particular case. There was room for disagreement about whether Ms. Henry was entitled to an NEB, and Ms. G did disagree. Nevertheless, she continued to request further information and to communicate that she would reconsider an NEB election, presumably if she received information she considered persuasive. This was not an unreasonable position in this particular case.


1. Ms. Henry was entitled to a non-earner benefit of $185 per week from October 27, 2007 to April 28, 2009, and $320 per week from that point on, under the Schedule.

2. Ms. Henry was entitled to interest on overdue amounts under the Schedule.

3. State Farm was not liable to pay a special award.

Posted under Accident Benefit News, Automobile Accident Benefits, Brain Injury, Car Accidents, Catastrophic Injury, Disability Insurance, Fractures, Pain and Suffering, Paraplegia, Treatment

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