Policy
Permanent disability benefits are normally paid in the form of periodic monthly payments. The WSIB may, however, in its discretion, commute, in whole or part, the permanent disability benefit to a worker.
Purpose
The purpose of this policy is to provide guidelines respecting the commutation of permanent disability benefits.
Guidelines
Authorization criteria: commutation to assist with obtaining or maintaining employment
A commutation of a monthly permanent disability benefit may be authorized when
- required as a new or continuing rehabilitative measure intended to enable the person to obtain or maintain suitable employment by reducing the effects of a physical and/or psychological disability
- medical evidence indicates that the worker's financial situation is producing a disability, which is preventing the worker from obtaining or maintaining employment, and where a commutation will significantly remedy the situation.
"Reducing the effects of a disability" means reducing the precise limitations imposed by that disability. The phrase can be equated with reducing the disability itself. There must be a direct link between the commutation and the reduction of the effects of the disability. There is no direct link between the commutation and employment.
The sequence must be
commutation --> reduced effects --> employment
"Medical evidence" ordinarily means written evidence by a psychiatrist that the worker's financial situation is producing a disability (usually psychological in nature). The evidence must indicate that resolution of the financial problem will allow the worker to obtain employment or maintain an existing job.
The "financial situation producing a disability" does not cover habitual financial problems which predate the work-related accident, but rather, financial problems that have arisen since the worker's accident that result in a disability.
As the primary focus is to reduce the effects of the disability, commutation requests made for purely financial reasons do not conform to the intent of the policy.
A request for commutation must meet the following requirements
- it must be intended for a specific rehabilitation purpose
- alternative resources are not available for the intended purpose
- it must not jeopardize the applicant's ability to meet ongoing financial obligations
- counselling must first be explored.
Authorization criteria: impairment of earning capacity does not exceed 10 per cent
Unless the worker elects to receive the permanent disability benefit in monthly payments, the benefit is commuted to a lump sum when
- the impairment of the worker's earning capacity, estimated from the nature and degree of the injury, does not exceed 10 per cent, and it is medically reasonable to conclude that the impairment of earning capacity will not change; and
- the combined permanent disability benefits of all claims for a worker are not greater than 10 per cent.
Examples
1) Worker suffers injury to right shoulder and receives permanent disability benefit representing 10 per cent impairment of earning capacity. Permanent disability assessment indicates that worker's right shoulder condition not likely to deteriorate. WSIB authorizes commutation of benefit.
2) Worker receives permanent disability benefit representing a 3 per cent impairment of earning capacity. Benefit commuted to a lump sum. Worker subsequently reassessed, and permanent disability benefit now represents 11 per cent impairment of earning capacity. Amount representing remaining 8 per cent impairment of earning capacity (11 per cent - 3 per cent) should not be commuted to a lump sum since the total impairment of earning capacity exceeds 10 per cent. Benefit paid monthly.
Elections at time of interview
Unlike commutations that are authorized to assist with obtaining or maintaining employment, it is not the responsibility of the worker to request a commutation of the permanent disability benefit in cases where the impairment of earning capacity does not exceed 10 per cent. At the time of the permanent disability assessment, the WSIB informs the worker of the methods of payment.
If a worker elects to receive a commuted permanent disability benefit at the time of permanent disability assessment, the WSIB informs the worker of the authorization criteria that must be met, and provides a complete explanation of the implications of a commuted permanent disability benefit.
The information is confirmed in writing.
Request by application
If a worker elects to receive a commuted permanent disability benefit at the time of permanent disability assessment, the WSIB informs the worker of the authorization criteria that must be met, and provides a complete explanation of the implications of a commuted permanent disability benefit.
Authorization
When a commutation of a permanent disability benefit is authorized, the WSIB informs the worker in writing of the reasons why the commutation was authorized and its impact on future entitlement.
This includes an explanation that the commutation precludes the worker from any future cost of living adjustments (e.g., annual indexing, see 18-01-14, Annual Indexing). However, the updated value of the commutation will be deducted from the payment of any additional compensation benefits in the same claim.
Commuted permanent disability benefits will not be reconstituted. However, if a permanent disability worsens, the WSIB reassesses the worker's disability (see 18-07-01, Determining the Degree of Disability).
When a commutation of a permanent disability benefit is not authorized, the WSIB provides, in writing, full and detailed reasons as to why the commutation was denied.
Application date
This policy applies to all decisions made for entitlement periods on or after January 1, 2018, for accidents prior to January 2, 1990.
Document History
This document replaces 18-07-06 dated March 3, 2008.
This document previously published as:
18-07-06 dated October 12, 2004
05-03-08 dated October 2, 1991.
References
Legislative Authority
Workplace Safety and Insurance Act, as amended
Sections 102, 103.1
Workers' Compensation Act, R.S.O. 1990, as amended
Sections 144, 145, 146
Workers' Compensation Act, R.S.O. 1980, as amended
Sections 26(1), 45(4), 132
Minute
Administrative
#10, December 11, 2017, Page 551