Future CPP Benefits and ICBC UMP Deductions
Last year an arbitration award was released addressing the deduction of future CPP benefits from an ICBC UMP Claim.
In last year’s case (ME v. ICBC) the 32 year old Claimant was severely injured in a 1997 motor vehicle collision. She suffered serious brain trauma and as a result “was left functioning at a Grade 7 level in terms of her academics“. Despite her long term injury the “very ambitious” claimant re-entered the workforce and by the time of her arbitration she had secured full time employment. Prior to this the Claimant had received CPP benefits totally$78,542.94. These benefits were terminated with the Plaintiff’s return to work. It was agreed that ICBC could deduct this prior to paying out on the Claimant’s UMP Claim.
The parties could not agree as to how much more ICBC could deduct given the possibility of future CPP payments. ICBC argued that the present day value of future CPP benefits should deducted, namely $135,652. Arbitrator Boskovich found that while such a deduction would be unreasonable a modest deduction should apply to address the reality that the Plaintiff may at some point in the future receive CPP benefits. Arbitrator Boskovitch reduced ICBC’s UMP payment by just over $20,000 to take this risk into account. In doing so the following reasons were provided:
102. I agree with Counsel that the standard of proof to be applied to future hypothetical events is simple probability and not the balance of probabilities. That being said it remains that the probability, possibility or chance that a future event may occur, in this case the Claimant applying for and receiving CPP disability benefits in relation to her accident injuries, must be a real and substantial one.
103. In addressing whether or not there is a real and substantial possibility of the Claimant receiving CPP disability benefits in the future one has to consider the relative likelihood of both positive and negative contingencies that might affect the Claimant’s ability to work and the anticipated course with respect to her accident injuries/disabilities…
116. It has been 13 years since the accident. 2010 will be the first full year of employment the Claimant has maintained since the accident. To assume the Claimant’s accident injuries, in particular, her very serious brain injury and deficits are going to have no impact on her ability to work to age 65 is unreasonable.
117. However, it does not automatically mean that the impact translates into a real and substantial risk that the Claimant will face a severe and prolonged mental or physical disability such that she is not substantially gainfully employable as defined in the CPP Legislation.
118. That is not to say there is no risk whatsoever. I cannot ignore the concerns outlined by the Claimant’s Mother. As well, I cannot ignore the evidence of Dr. LeBlanc. It may be difficult for the Claimant to find jobs over the course of her working life. Such jobs must have structured routine, few distractions and no multi-tasking. Her cognitive issues may be aggravated in unfamiliar and stressful situations.
119. Having regard to all of the evidence, I believe there is a 15% chance or possibility that the Claimant will apply for and receive disability benefits from CPP in connection with her accident injuries.
120. The parties agree that the present day value of the CPP disability payments to the Claimant’s age 65 is $135,652.00 and, in this regard, the appropriate contingency deduction to be made pursuant to Regulation 148.1(1)(f) is $20,347.80
For more on this topic you can click here to read my summary of the 2008 UMP Arbitration Award in SPW v. ICBC.