Interest Payments

Policy

The WSIB pays interest on delayed benefit payments to workers or, in case of death, to their survivors. Delayed benefit payments are payments issued after the standard payment due date.

Two groups of workers are entitled to interest on delayed benefit payments

  • workers whose claims are registered before January 1, 1990, only if the delayed benefit payment is the result of an Appeals Resolution Officer (ARO) or the Workplace Safety and Insurance Appeals Tribunal (WSIAT) overturning a decision and now granting entitlement to compensation benefits
  • workers whose claims are registered on or after January 1, 1990.

Interest is also payable if an adjudication decision is overturned because a policy is revised, after having been found to be contrary to the law by the Board of Directors.

This policy is intended to place workers in the same financial position that they would have been in had the WSIB originally made the appropriate decision, or processed the benefit payment on or before the standard payment due date.

Guidelines

Delayed benefit payments

Interest is paid on the following delayed benefit payments only. Interest is not paid on other delayed benefits or expenses (e.g., health care benefits).

  • loss of earnings benefits (LOE)
  • non-economic loss (NEL) periodic and lump sum benefits
  • loss of retirement (LRI) periodic and lump sum benefits
  • re-employment payments
  • survivor pension and lump sum benefits
  • temporary total/partial disability benefits
  • future loss of earnings (FEL) benefits and supplements
  • permanent partial disability supplements
  • permanent disability pension and lump sum benefits, and
  • disfigurement benefits.

Standard payment due dates

The standard payment due dates for benefit payments are

  • every 2 weeks from the date of disability/impairment for LOE, temporary total/partial disability benefits and re-employment payments
  • the first day of each month following the month in which the benefit is determined for periodic payments of FEL, FEL supplements, permanent disability pension, permanent partial disability supplements and survivor pension benefits
  • the first day of each month following the date the worker reaches maximum medical rehabilitation (MMR) for periodic payment of NEL benefits
  • the date of MMR for lump sum NEL benefits
  • the first day of each month following a worker's 65th birthday for periodic payment of LRI benefits
  • the day following the end of the last monthly payment period for all lump sum payments of FEL, LRI, and permanent disability pension benefits
  • 14 days from the rating date for disfigurement benefits
  • 14 days from the date of the worker's death for survivor lump sum benefits.

Claims registered before January 1, 1990

The WSIB pays interest if

  • the claim was registered before January 1, 1990, and
  • there is an ARO or WSIAT decision, dated January 6, 1989 or later, which overturns a previous decision and now grants entitlement to compensation benefits.

Workers are entitled to interest on benefits that they should have received up to the date of the ARO or WSIAT decision only. Therefore, interest accrues

  • from the date of the first standard payment due date or January 6, 1989, whichever is later,
  • to the payment issue date for the retroactive benefit payments made as a result of the ARO or WSIAT decision.

Benefits payable after the ARO or WSIAT decision are not subject to interest payments.

If the ARO or WSIAT decision results in more than one retroactive benefit payment, interest accrues from each standard payment due date on or after January 6, 1989.

Claims registered on or after January 1, 1990

The WSIB pays interest on delayed benefits if the claim was registered on or after January 1, 1990, although the injury or disease can have occurred at any time. Interest accrues

  • from the due date of the first standard payment on or after January 1, 1990,
  • to the payment issue date for the delayed benefit payment.

Policy revision

If a policy is revised because it is found to be contrary to the law by the Board of Directors, and a previous adjudication decision denying entitlement is reconsidered as a result, interest is paid if the previous decision is overturned. Regardless of the claim registration date, interest accrues from

  • the date of the worker's disability, impairment or death, or,
  • January 6, 1989, whichever is later.

Interest calculation

The WSIB pays interest at a rate that is equal to the post-judgement interest rate under the Courts of Justice Act.

NOTE

The post-judgement interest rate, set quarterly under the Courts of Justice Act, is the official Bank Rate (rounded up to the next higher whole number if it is a fraction) plus one per cent. The post-judgement interest rates are published quarterly in the Ontario Gazette.

The interest rate applied to the retroactive benefit payments is the rate which is current on the date

  • of the ARO or WSIAT decision
  • the decision is made to grant entitlement to compensation benefits.

Interest payments are calculated on the basis of simple interest.

Employer advances

Employer advances are any payments made to a worker or his/her survivors, relating to the injury/disease, paid by the worker's employer or provided wholly at the employer's expense.

If the employer advanced the worker all or part of the payments that should have been paid by the WSIB, interest is paid only on the portion of delayed WSIB benefits which exceeds the advances from the employer for the same entitlement period.

For more information on employer advances see 18-01-11, Compensation Advances by Employer.

Third party payments

Definitions

Assignment - a written and signed contract in which a worker directs the payment of WSIB benefits, for a period of time, to a third party.

Third party payments - lump sum or periodic payments paid to a worker by a third party which include but are not limited to

  • an insurance company (e.g., sickness and accident payments, funded by an employer health benefit plan), or
  • a government assistance program (e.g., employment insurance, social services).

Third party payments do not include employer advances as defined above.

Third party lump sum - a one time retroactive payment to a worker by a third party, for past benefit periods.

Third party periodic payments - payments made to a worker by a third party on the regular payment cycle of the third party.

Delayed third party payments - any payments that are delayed to a worker by a third party, this could include lump sum or periodic payments.

Payment of interest and third party payments

If a worker has received delayed third party payments, either lump sum or periodic, interest is paid on the total delayed WSIB benefits for the same entitlement period.

If a worker is in receipt of periodic payments from a third party, which were paid on time, interest is paid only on the portion of delayed WSIB benefits which exceeds the third party payments for the same entitlement period.

Example 1

WSIB entitlement decision of September 15, 2004 grants:

- LOE benefits from October 25, 2003 to April 6, 2004

A third party assignment is on the WSIB file for:

- a third party lump sum for the period October 25, 2003 to November 30, 2003 inclusive, paid late by the third party to the worker

- third party periodic payments for December 1, 2003 to January 31, 2004 inclusive, paid late by the third party to the worker

The worker will receive

  • any loss of earnings benefits which exceed the amount of the third party benefits for the period October 25, 2003 to January 31, 2004 inclusive,

  • full loss of earnings benefits for the period February 1, 2004 to April 6, 2004, and

  • interest calculated on the total amount of loss of earnings benefits owing for the period October 25, 2003 to April 6, 2004, as all payments made by the third party are "delayed third party payments."

The third party will receive the amount of the assignment. (This assumes the weekly rate of the assignment is equal to or less than the weekly LOE benefit rate.)

Example 2

WSIB entitlement decision of September 15, 2004 grants:

- LOE benefits October 25, 2003 to April 6, 2004

A third party assignment is on the WSIB file for:

- a third party lump sum for the period October 25, 2003 to November 30, 2003 inclusive, paid late by the third party to the worker

- third party periodic payments for December 1, 2003 to January 31, 2004 inclusive, paid on time by the third party to the worker

The worker will receive

  • any loss of earnings benefits which exceed the amount of the third party benefits for the period October 25, 2003 to January 31, 2004 inclusive,

  • interest calculated on the total amount of loss of earnings benefits owing for the period October 25, 2003 to November 30, 2003 inclusive (as the third party lump sum is a "delayed third party payment"),

  • interest calculated on any loss of earnings benefits which exceed the amount of the assigned benefits for the period December 1, 2003 to January 31, 2004 inclusive, and

  • full loss of earnings benefits for the period February 1, 2004 to April 6, 2004, plus interest.

The third party will receive the amount of the assignment. (This assumes the weekly rate of the assignment is equal to or less than the weekly LOE benefit rate.)

Interest payments and garnishment of WSIB benefits

If the WSIB benefit payments are redirected to honour a garnishment such as a

  • Support Deduction Order for family support or maintenance, or
  • Requirement to Pay notice submitted by the Canada Revenue Agency

interest is paid on the total delayed WSIB benefit payment. These are the only circumstances in which interest payments may be redirected.

For more information on redirected benefits see 18-01-06, Redirected Benefit Payments.

Interest costs

Interest payments for Schedule 1 employers are charged against an administrative account. These costs are not applied to the employer's Accident Cost Statement.

Application date

This policy applies to all decisions made on or after August 1, 2004, for all claims as specifically outlined in the "Policy" section of this document.

Document History

This document replaces 05-01-08 dated July 19, 2004.

References

Legislative Authority

Workplace Safety and Insurance Act, 1997, as amended
Sections 41(13)(b), 43, 45, 46, 48(2),(3),(4),(13),(14),(15),(17),(18), 56, 109

Workers' Compensation Act, R.S.O. 1990, as amended
Sections 35(1)(a),(b), 37, 42, 43, 44, 45, 54(13)(b), 147

Workers' Compensation Act, R.S.O. 1980, as amended
Section 27(1), 45(1),(4),(10), 46

Minute

Board of Directors
#15, June 10, 2004, Page 6630