Well Then -- NEBs are Deductible from LTD payments

February 09, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

In a recent Ontario Court of Appeals Decision the court has affirmed that Long Term Disability Benefits carriers can now get a deduction for any Non-Earner Benefits that an Insured receives.  The Decision released November 14, 2016  dismissed the Insured’s appeal seeking to overturn the determination that her NEBs could be deducted from LTD payments.

In this particular case Ms. Hamblin had been involved in two car accidents. She was working when the first one occurred and began to received LTD benefits from the insurer. The second accident happened while she was on LTD and as she wasn’t working she opted to receive NEBs from her car insurance policy. Although it is clearly laid out in the Schedule that the deduction is allowed, the Car Insurer did not deduct any of the LTD payments from the NEBs. Once the two insurers were notified of the situation, the LTD insurer began to reduce their monthly benefit by an amount equal to the NEB. There was the argument made by the insurers that allowing both payments in full amounted to double dipping of benefits.

Counsel for Ms. Hamblin argued that this is indeed contrary to the decision in Bannon which has prohibited deductions of this kind. The decision in Bannon stated that the Court can only deduct like benefits from like benefits. In this case NEB and LTD are not the same as NEBs are not ‘income replacement’ benefits. Unfortunately for Ms. Hamblin, and many others, the Court disagreed. They found that the wording in Ms.  Hamblin’s policy was clear – her policy allowed for the deduction of any disability payments paid under insurance law. There was no restriction to exclude IRB payments. As the NEB payment were granted to Ms. Hamblin on the basis she suffered a complete inability to carry on a normal life due to her accident related impairments these payments were correctly considered disability payments under car insurance law.

The results of the decision are clear. Both auto insurers and LTD insurers must be diligent in their determinations of all other sources of an insured’s income. The decision makes it abundantly clear that NEBs are considered disability payments under automobile insurance law.

About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

It is important that you review your accident benefit file with one of our experienced personal injury / car accident lawyers to ensure that you obtain access to all your benefits which include, but are limited to, things like physiotherapy, income replacement benefits, vocational retraining and home modifications.