If a serious car accident — or another type of motor vehicle accident — prevents you from working, replacing your lost income may involve more than one source of benefits.
Depending on your circumstances and the coverage available to you, income replacement may come from:
- Income Replacement Benefits (IRBs) through your Ontario auto insurance policy
- Sick leave or other workplace benefits
- Short-term or long-term disability benefits
- A claim for income loss against the at-fault driver, where applicable
For Ontario auto insurance policies entered into on or after July 1, 2026, Income Replacement Benefits are optional rather than automatically included. This makes it especially important to confirm what coverage is available under your policy and to understand how different sources of income replacement may work together.
The amount you receive can also depend on factors such as your pre-accident earnings and how your employment is characterized. As one recent HIMPRO case illustrates, even a dispute over whether someone is an employee or self-employed can make a significant difference in the amount of Income Replacement Benefits payable.
In this article:
What If You Can’t Work After a Car Accident in Ontario?
How Do Income Replacement Benefits Work in Ontario?
Can Workplace Benefits Replace Your Income After an Accident?
What About Long-Term Disability Benefits After a Car Accident?
How Can Different Income Replacement Benefits Work Together?
Can You Recover Income Loss Not Covered by Insurance?
What If Your Insurer Disputes or Underpays Your Income Replacement Benefit?
What If You Can’t Work After a Car Accident in Ontario?
If your injuries prevent you from returning to work after a car accident, the financial impact can begin almost immediately. The question is not only whether you qualify for a benefit, but which sources of replacement income are available and how they interact.
Some benefits may be available right away, others only after a waiting period, and amounts received from one source may affect what is payable from another. Identifying the coverage and benefits available to you can help reduce gaps in income while you are unable to work.
How Do Income Replacement Benefits Work in Ontario?
Income Replacement Benefits (IRBs) are accident benefits available under Ontario’s Statutory Accident Benefits Schedule (SABS). They are designed to replace part of the income you lose when injuries from a motor vehicle accident prevent you from working. They are paid through automobile insurance and, where the coverage applies, are available regardless of who caused the accident.
For policies entered into on or after July 1, 2026, Income Replacement Benefits are optional and must be included in the coverage purchased. If you had an auto insurance policy before July 1, 2026, however, your existing Income Replacement Benefit coverage generally continues when the policy renews unless you agree in writing to change or decline it. Because coverage can now vary from one policy to another, it is important to confirm the Income Replacement Benefits available under your particular policy.
During the first 104 weeks after an accident, an eligible claimant must generally be substantially unable to perform the essential tasks of their employment as a result of the accident. A stricter test applies if Income Replacement Benefits are claimed beyond 104 weeks.
How Much Can Income Replacement Benefits Pay?
The amount of an Income Replacement Benefit depends on your pre-accident earnings, other income replacement assistance you may be receiving, and the weekly IRB limit available under the applicable auto insurance policy.
Where the policy provides the $400 weekly IRB limit, an employed claimant’s benefit is generally based on 70% of gross employment income, up to that limit. Higher weekly limits may be available where additional coverage has been purchased. For policies entered into on or after July 1, 2026, available coverage and limits may vary by insurer.
The insurer is also not required to pay an IRB for the first week of disability. This is one reason why workplace sick leave, disability insurance and other sources of income replacement can become important when trying to minimize the financial impact of being unable to work after a serious accident.
Calculations involving self-employment can be different, which is one reason a person’s employment status can have an important effect on the amount payable.
Can Your Employment Status Affect Your Income Replacement Benefit?
Yes. Ontario’s accident benefits rules calculate employment and self-employment income differently. As a result, a dispute over whether someone should be treated as an employee or as self-employed can have a significant impact on the amount of Income Replacement Benefits they receive.
This issue can arise when a person’s working arrangement does not fit neatly into one category — for example, where they are paid through an employment agency, are described as a contractor, or do not have the usual payroll deductions associated with an employee.
A recent HIMPRO case shows how important that distinction can become in practice.
Can Workplace Benefits Replace Your Income After an Accident?
If you have benefits through your employer, they may provide another source of income while you are unable to work. Depending on your workplace and benefit plan, this could include paid sick leave, salary continuation or short-term disability benefits.
The amount paid and how long the benefits last will depend on the terms of your particular plan. In some cases, workplace benefits may replace more of your regular income than an Income Replacement Benefit under your auto insurance policy, particularly during the first weeks or months after an accident.
Understanding what workplace coverage you have — and how it interacts with your auto insurance benefits — can help you identify potential gaps in income and understand whether one benefit may affect another.
What About Long-Term Disability Benefits After a Car Accident?
If you have long-term disability (LTD) coverage through your employer or a private insurance policy, it may provide another source of income if your injuries keep you from working for an extended period.
LTD policies generally have a waiting period before benefits begin, and the amount and duration of benefits will depend on the terms of your particular policy. Because LTD benefits may become available while you are also receiving, or are eligible to receive, other forms of income replacement, it is important to understand how those benefits interact rather than considering each one in isolation.
How Can Different Income Replacement Benefits Work Together?
Having access to more than one source of income replacement does not necessarily mean that you can collect the full amount of each benefit at the same time. Payments from a workplace or disability plan may affect the amount payable under your auto insurance policy, so the different sources of income need to be considered together.
For example, assume you earned $1,000 per week before a serious car accident and your injuries prevent you from working. You have four weeks of paid sick leave through your employer and a long-term disability (LTD) policy with a four-month waiting period before benefits can begin.
During the first four weeks, your paid sick leave may replace your regular income. Once those benefits end, Income Replacement Benefits under your auto insurance policy may provide income during the remaining period before your LTD coverage begins, assuming you qualify and have the applicable IRB coverage.
When LTD benefits begin, they may in turn affect the amount of Income Replacement Benefits payable by your auto insurer. The exact result will depend on the benefits available to you and the terms of the applicable policies.
This is why maximizing income replacement after a serious accident is not simply a matter of applying for every available benefit. A personal injury lawyer can help identify the different sources of income replacement available to you, understand how they interact, and address issues that could affect the amount you ultimately receive.
Can You Recover Income Loss Not Covered by Insurance?
If another driver was responsible for the accident, you may also be able to claim compensation for income loss that is not covered by your Income Replacement Benefits or other sources of income replacement.
In Ontario, there are specific rules governing how income loss is calculated in a claim against an at-fault driver, including limits on the amount of pre-trial income loss that can be recovered and deductions for certain benefits received from other sources. A claim may also include loss of future earning capacity where accident-related injuries are expected to affect your ability to earn income in the future.
A personal injury lawyer experienced in serious motor vehicle accident claims can assess the income you have lost, the benefits available to you and whether additional losses can be pursued as part of your claim against the at-fault driver. Looking at the accident benefits and tort claims together can be important when determining how much of your overall income loss may ultimately be recovered.
What If Your Insurer Disputes or Underpays Your Income Replacement Benefit?
Even when an insurer accepts that you qualify for Income Replacement Benefits, disagreements can arise over how much you should receive. A dispute may involve your pre-accident income, whether you should be treated as an employee or self-employed, other income replacement assistance you are receiving, or how long you remain entitled to benefits.
An insurer may also deny or stop Income Replacement Benefits because it takes the position that you no longer meet the applicable disability test or that the coverage does not apply to your circumstances.
If the dispute cannot be resolved with the insurer, it may be brought to Ontario’s Licence Appeal Tribunal – Automobile Accident Benefits Service (LAT-AABS), which hears disputes about entitlement to statutory accident benefits and the amount of benefits payable.
A lawyer experienced in accident benefits claims can review the insurer’s position, determine what medical, employment and financial evidence may be needed, and represent you in challenging a denial or disputed benefit.
HIMPRO’s personal injury lawyers help people injured in serious motor vehicle accidents understand their available benefits, challenge disputed insurance claims and pursue compensation for income losses where appropriate.
If you have questions about Income Replacement Benefits or how a serious accident may affect your income, contact us for a free consultation to discuss your situation.
At HIMPRO, we build winning cases. That’s the HIMPRO Advantage™.
