Loss of Income
Example
- Claimant:
Jack - Male, aged 38.
- Background:
Jack resides in Ontario and always worked in an office.
He became disabled due to his HCV infection on January 1,
2000. Below is how his LOI calculation would be done:
| |
|
ANSWER |
|
Step
1 |
Determine
Jack's date of disability. |
January
1, 2000
(see table below) |
|
Step 2 |
Select Jack's three
consecutive highest income years.
NOTE! Consider
every year predating your date of disability.
|
1987,
1988, 1989
(see table below) |
|
Step 3 |
Calculate pre-claim
gross income, which is the average Earned Income
earned during the 3 years chosen above.
NOTE! Even though
Jack earned an average of $40,333 in the years 1997,
1998 and 1999, he selected the three consecutive
years 1987, 1988 and 1989 (average income $31,167)
because the average income for those three years,
when multiplied by the Pension Index ratio for 1988
was greater. |
$ 31,167.00 |
| |
The
average is multiplied by the Pension Index ratio of
1988 (the middle year). |
$43,495.00
after indexation
(see
table below) |
|
Step 4 |
Calculate
your post-claim gross income for every year postdating
Jack's date of disability. Since Jack became disabled
in the year 2000, he may submit a claim for the post-claim
years 2000, 2001 and 2002. |
Post-claim
years = 2000, 2001 & 2002 |
|
Step 5 |
Jack completed Form
GEN 10.
He also submitted all
necessary financial/income tax documentation
confirming his pre-claim income and post-claim income. |
GEN
10, T1 Income Tax returns & Notices of Assessment |
|
Step 6 |
The
Administrator completes loss of income calculation
in order to determine the amount payable
= Jack's annual loss of net income for the
years 2000, 2001 and 2002 respectively. |
See
below |
Pre-claim
Gross Income Calculation
|
Year
|
Status
|
Employment
Income |
Average pre-claim gross income
|
Pension Index
|
Average pre-claim gross income in 2001 dollars
|
|
|
|
|
A
|
B
|
(A/B) X 112.9 |
|
|
employed |
17,000
|
xx,xxx
|
|
|
|
1986
|
employed |
22,000
|
23,000
|
74.5
|
34,855
|
|
1987 
|
 |
employed &
HCV Infected
|
30,000
|
27,833
|
77.6
|
40,494
|
|
1988
|
employed
|
31,500
|
31,167 |
80.9
|
43,495 |
|
1989
|
employed
|
32,000
|
32,167
|
84.2
|
43,131
|
|
1990
|
employed
|
33,000
|
33,500
|
88.3
|
42,833
|
|
1991
|
employed
|
35,500
|
34,833
|
92.5
|
42,515
|
|
1992
|
employed
|
36,000
|
36,000
|
97.9
|
41,516
|
|
1993
|
employed
|
36,500
|
35,833
|
99.7
|
40,577
|
|
1994
|
employed
|
35,000
|
35,833
|
101.5
|
39,858
|
|
1995
|
employed
|
36,000
|
36,333
|
102.0
|
40,216
|
|
1996
|
employed
|
38,000
|
37,667
|
103.9
|
40,930
|
|
1997
|
employed
|
39,000
|
39,000
|
105.5
|
41,736
|
|
1998
|
employed
|
40,000
|
40,333
|
107.4
|
42,398
|
|
1999
|
employed
|
42,000
|
N/A
|
108.4
|
N/A
|
|
|
2000 |
date of
disability |
15,000 |
Not Applicable |
110.1 |
Not Applicable |
|
2001 |
disabled |
12,000 |
Not Applicable |
112.9 |
Not Applicable |
|
2002 |
disabled |
3,000 |
Not Applicable |
116.3 |
Not Applicable |
|
Loss
of Income Calculation (top)
| |
Post-Claim
Years |
| |
2000 |
2001 |
2002 |
| Pre-claim
Income Calculation |
| Average
base year income before indexation adjustment |
$31,167 |
$31,167
|
$31,167 |
| Average
base year income adjusted for indexation |
|
|
$44,805 |
| Gross
income limit, adjusted for indexation |
|
|
$321,864 |
| Pre-claim
gross income |
$42,416
|
$43,495
|
$44,805 |
| Minus:
Ordinary deductions (income tax, CPP, EI) |
|
|
($11,355) |
| Pre-claim
net income |
|
|
$33,450 |
| |
|
|
|
| Post-claim
Income Calculation |
| Actual
employment or self-employment |
15,000 |
12,000
|
3,000 |
| Other
disability benefits |
2,000
|
2,000
|
2,000 |
| Total
Employment and Disability Income |
|
|
5,000 |
| Minus:
Ordinary deductions (income tax, CPP, EI) |
|
|
(66) |
| Post-claim
net income |
|
|
4,934 |
| |
|
|
|
| Calculation
of Amounts Payable |
| Loss
of income for compensation purposes @ 100% (subtract
Post-claim Net Income from Pre-claim Net Income) |
|
|
28,516 |
| Amount
payable to Jack |
|
|
|
(Top)
|
