Disability benefits are deductible from a damage award arising from a motor vehicle accident

The Court held that Disability Level Two payments received by the Plaintiff from the government were a form of income replacement and were deductible from a past wage loss award.

Kerpan v. Insurance Corp. of British Columbia, [2006] B.C.J. No. 3079., British Columbia Supreme Court, Shaw J., November 30, 2006

The Plaintiff was injured in a 2000 accident caused by an unidentified driver. At trial, the jury awarded $150,000 in damages, including a component for past wage loss. The Plaintiff had received social welfare payments regularly prior to the accident. The Plaintiff received disability benefits between the time of the accident and the time of trial. ICBC sought to deduct from the jury award the amounts paid to the Plaintiff by the government as disability benefits.

The Court agreed with ICBC’s position that the Disability Level Two payments which the Plaintiff received were, in substance, social assistance payments and must therefore be deducted pursuant to M.B. v. British Columbia, [2003] 2 S.C.R. 477. The Court reviewed the applicable legislation and held that the fact that the Plaintiff was disabled did not change the nature of payments made to her, which were a form of income replacement. In the result, the Court ordered that the deductions claimed by ICBC be deducted from the jury assessments.

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