Area of Law: Workers' Compensation
Answer Number: 643
Non-Economic Loss and Permanent Disability benefitsRegion: Ontario Answer Number: 643
Non-Economic Loss benefits
Non-Economic Loss (NEL) benefits are not paid to compensate the worker for lost wages, but rather to compensate the person for a permanent physical impairment stemming from a workplace injury or illness. The injury or illness must have occurred after January 1, 1990. A permanent impairment means a physical, functional, or psychological loss of ability that is expected to last for the rest of the person’s life. To qualify for NEL benefits, the medical report must show the condition will not likely improve, referred to as maximum medical recovery or MMR.
The amount of your NEL benefit is determined by how serious your impairment is, which is expressed as a percentage. The more serious the impairment, the higher the percentage. This percentage is then multiplied by a base amount determined by law and adjusted for your age. For instance: an amount is added for every year you were under 45 at the time of the injury; an amount is subtracted for every year you were over 45 at the time of the injury. After the base amount is adjusted for your age and for inflation, it is multiplied by your impairment percentage, and this amount is your NEL benefit.
NEL benefits may be paid in monthly installments or in a lump-sum, depending on the dollar amount of the benefit.
Permanent Disability benefit
If a worker was injured before January 2, 1990 and is suffering a permanent disability as a result of that injury, he or she may be entitled to a lifetime monthly pension as compensation for both loss of earning capacity and for the actual physical loss or impairment itself.
The Workplace Safety and Insurance Board (WSIB) conducts a permanent disability evaluation when medical treatment has ended, the worker`s condition is stable and maximum medical recovery has occurred. The amount of the pension depends on:
- how much you were earning before your accident
- the date of your injury, and
- the level of your permanent disability, as determined through a medical examination performed by a WSIB doctor.
For injuries that occurred before April 1, 1985, the pension is based on 75% of the worker’s gross earnings (earnings before deductions) for the period worked immediately before the date of your accident, and adjusted for inflation.
For injuries that occurred after April 1, 1985 and before January 2, 1990, the pension is based on 90% of the worker’s net earnings (earnings after deductions) before the date of the accident, and adjusted for inflation.
If the pension award is less than 10% of the workers’ claim, it can be paid in one lump-sum payment, as opposed to monthly.
For more information, contact the Workplace Safety and Insurance Board.
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