Significant Erosion of Accident Benefits

The Government of Ontario, in a surprise announcement contained in its budget, included a promise to drastically cut statutory accident benefits.

The promised cuts to benefits include:

  • a tightened definition for the test for catastrophic impairment so that it can be “consistent with more up-to-date medical information and knowledge;”
  • a reduction in the limits available for catastrophically impaired claimants to a combined cap of $1 million, down from the current $2 million cap;
  • for non-catastrophic claims, (other than minors) the duration of benefits is reduced from ten years to five years;
  • for non-catastrophic claims, the total limits available for medical/rehabilitation claims and attendant care, will be capped at $65,000, down from the current total of $86,000;
  • non-earner benefits will no longer have a six month waiting period, but non-earner benefits will only be payable for two years in total;
  • goods and services that are not specifically listed in the Statutory Accident Benefits Schedule will only be payable if “essential” and agreed upon by the insurer.

It is the government’s intention to allow motorists to make up for these reductions through the purchase of optional benefits.

As it relates to tort claims, the $30,000 deductible created in 2003 will now be increased to reflect inflation and will be linked to inflation in the future.  Similarly the monetary thresholds for the vanishing deductible ($100,000 for pain and suffering and $50,000 for Family Law Act claims) will also be increased by an inflation adjusted amount.

The actual text of the budget can be read here.

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