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Tribunal Rules on 52 Week Calculation for Self-Employed Individuals

March 12, 2024

In the recent Licence Appeal Tribunal (LAT) decision, Aarooj v TD Insurance (21-014314/AABS), the tribunal clarified how to calculate pre-accident income for a self-employed individual who commenced their self-employment in the year of the accident.

In this case, the applicant – a self-employed individual – initiated their business in the year of the accident. When applying for Income Replacement Benefits (IRB) under the Statutory Accident Benefits Schedule (SABS), the applicant argued for a 52-week calculation for their pre-accident income. However, the tribunal ruled that the applicant was subject to Section 4(3) of the SABS. This section mandates the use of the last completed taxation year to determine the IRBs payable for self-employed individuals.

Section 4(3) of the SABS states that the weekly income or loss from self-employment at the time of the accident is based on a business’ income or loss reported in the last completed tax year. This provision overrides any considerations regarding the timing of the commencement of self-employment.

Therefore, despite the applicant’s self-employment commencing in the year of the accident, the tribunal ruled that the last completed taxation year must be used, resulting in an IRB quantum of nil.

Read the decision in full detail here: Aarooj v TD Insurance (21-014314/AABS)

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