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Section 4(2)3 of the SABS Does Not Apply to Exclusively Self-Employed Claimants

July 9, 2025

The recent Licence Appeal Tribunal (LAT) decision, Zhu v Allstate Insurance Company of Canada, addressed the treatment of self-employment income and IRB quantum eligibility under the Statutory Accident Benefits Schedule (SABS).

In this case, the Applicant was self-employed at the time of the October 26, 2022 accident. There was no indication of concurrent employment, and her tax returns showed $2,497.00 in net business income in 2021 (the last completed taxation year before the accident) and $19,520.00 in 2022. The Applicant submitted that her IRB entitlement should be based on her 2022 income, or on the previous 52 weeks, citing that the imprecise wording of section 4(2)3 of the SABS leaves room for interpretation.

The Adjudicator rejected this argument, clarifying that section 4(3) of the SABS governs IRB calculation for individuals who were exclusively self-employed prior to the accident.

Because she was not concurrently or recently employed as defined in section 5(1)(1)(ii), the Adjudicator confirmed that section 4(2)3, which allows election between fiscal year and 52-week income, did not apply. In this case, only section 4(3) was applicable.

As a result, the Applicant’s IRBs were calculated using her 2021 income, resulting in a weekly entitlement of $38.00.

Takeaway

Where an individual is self-employed and not concurrently or recently employed, IRBs must be calculated using income from the last completed taxation year as prescribed in section 4(3) of the SABS.

Read the full decision here: Zhu v. Allstate Insurance Company of Canada (23-008184/AABS).

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