Commutations

Law

A loss of earnings (LOE) benefit can be commuted if

it is 10% or less of the worker’s full LOE benefit, and
the 72 month post-injury review period has expired, or
in the case of older workers (55 years of age or older), the worker has elected not to have the LOE benefit reviewed, see 18-03-04, Older Workers and LOE Benefits.

Guidelines

Definition

Commutation -- A one-time lump sum payment.

LOE benefit 10% or less

When workers become eligible for an LOE benefit commutation, the WSIB informs them in writing. The letter

explains that the LOE benefit will be commuted unless they choose to continue receiving bi-weekly payments until age 65
provides the amount of the commuted benefit, and
provides the deadline for responding to the letter.

After the letter is mailed, the WSIB makes 4 regular bi-weekly payments and then commutes the LOE benefit, unless the worker chooses to continue receiving bi-weekly payments.

Once a worker elects to continue with bi-weekly payments, the election is irrevocable. The worker cannot request that the LOE payment be commuted at a later date.

Exceptional cases - 72 months post-injury

A worker who is eligible to

receive a commutation at 72 months post-injury, and
who may, at some later date, suffer a significant deterioration in his/her work-related clinical condition resulting in a non-economic loss (NEL) redetermination and increased NEL benefit, and
who receives further LOE benefits and/or services within 24 months of the NEL redetermination

is again entitled to the commutation option. That is, the commutation option is attached to each subsequent LOE review that may occur after 72 months post-injury.

In all cases, however, the commutation option may only be considered if the value of the LOE benefit is 10% or less of the worker’s full LOE benefit.

For example, a worker received a 4% LOE commutation at 72 months post-injury and subsequently suffered a significant deterioration that resulted in a NEL redetermination and increased NEL benefit. The subsequent review also resulted in an increase to the LOE benefit from 4% to 8%.

In this case, the worker still has the option of either receiving a commutation (for the increased amount) because the LOE benefit is 10% or less, or electing to receive benefits on a bi-weekly basis until age 65.

Older workers

Older workers who choose not to have the LOE benefit reviewed may be entitled to a commutation even before the 72nd month post-injury review period has expired.

Workers who are eligible for the “no review” option, and who have an LOE benefit of 10% or less, are advised of both the “no review” and the commutation options by letter. The letter

explains the “no review” option, see 18-03-04, Older Workers and LOE Benefits.
explains that the LOE benefit will continue to be paid bi-weekly unless the worker chooses the “no review” option and chooses to have the benefit commuted
provides the amount of the commuted benefit, and
provides the deadline for responding to the letter.

After the letter is mailed the WSIB makes 4 further regular bi-weekly payments.

The worker must respond in the time provided to initiate one or both options. If a worker fails to respond to the letter, the WSIB will continue to pay bi-weekly benefits that may be reviewed. Only workers who choose the “no review” option can request a commutation.

Multiple claims and LOE benefits

If a worker is eligible to receive LOE benefits in more than one claim, the WSIB considers each claim as a separate entity. When determining whether a worker is eligible to receive a commutation, the LOE benefit in each claim is considered separately.

Application date

This policy applies to all decisions made on or after November 26, 2002, for accidents on or after January 1, 1998.

Document History

This document replaces 18-03-05 dated December 24, 2003.

This document was previously published as:
18-03-05 dated June 15, 1999
5.7 dated January 1, 1998.