Can Attendant Care Benefits provided to a Family Member be considered Income?

Default photo used for Can Attendant Care Benefits provided to a Family Member be considered Income?

When a family member receives an income associated with attendant care benefits, for their role in caring for an injured child, is it simply an act of familial love or a form of employment?

This was the underlying question to be resolved in arbitration between a mother providing 24-hour care for her catastrophically injured son and her insurer, in T.C. and Personal Insurance Company of Canada.

Case example

On October 31st, 2012, the applicant's son was involved in a very serious motor vehicle accident that caused life-threatening injuries. The boy's injuries subsequently resulted in his needing 24-hour attendant care and supervision.

The applicant, referred to as T.C., provided said attendant care services for her son, which meant she was unable to return to her employment in the retail industry. As a result, she became entitled to income replacement benefits (IRB) and later received these benefits past the mandatory 104-weeks, due to a diagnosis of a major depressive disorder, as well as PTSD and an adjustment disorder.

In February 2013, it was determined that the boy had sustained a catastrophic impairment pursuant to the statutory accident benefits schedule (SABS) and as a result, the insurer provided an attendant care benefit in the amount of $6,000 a month, which was paid to his mother.

In March 2013, the insurer reduced T.C.'s IRB payments to zero, on the basis that the $6,000 in attendant care benefits constitutes post-accident income. The insurer surmised that this monthly payment amounts to income from self-employment and thus needs to be deducted from the applicant's IRB payments.

The applicant disagreed with the insurer and citing Maurice v. The Queen and Pellerin v. The Queen, she argued that she was not self-employed and instead the money she received for taking care of her son was akin to gifts, inheritance or allowances between family members.

Legal Background

According to the SABS, an insurer can reduce the income replacement benefit provided to the insured if: one, the insured becomes employed after the accident and during the period in which he/she was eligible to receive income replacement benefit; or two, if the insured becomes self-employed after the accident and during the period in which he/she was eligible to receive income replacement benefit.

The SABS defines a self-employed person as an individual who engages in a trade, occupation, profession or other type of business as a sole proprietor or as a partner or is a controlling mind of a business carried on through one or more private corporations some or all of whose shares are owned by the person.

Therefore, the key issue for the arbitrator to decide on, was whether or not monies received for providing attendant care to a family member is considered post-accident income and as such, is deductible from the amount of the applicant's income replacement benefits.

The arbitrator ruled in the applicant's favor and decided that monies received for providing attendant care to a child or family member do not constitute post-accident income. The arbitrator noted that for the applicant to be a self-employed person, she needed to be engaged in a type of business as a sole proprietor, which she wasn't.

The arbitrator also challenged the insurer's argument that the money in the hands of a third-party provider would be considered income, by pointing out some key differences between the applicant and a third-party provider. These include:

  1. A caregiver's obligations are not limited to a maximum number of hours, as are a third-party provider.
  2. The applicant would likely provide the same level of care to her son, even if there was no attendant money available.
  3. The applicant never declared the attendant care payments on tax returns, as a third-party provider would, and she was not obligated to do so.
  4. The applicant has no flexibility in her hours, as her son needs her all the time.
  5. The applicant has never provided care to her son with the intent to make a profit.
  6. The arbitrator disagreed that s.3(7)(e) of the SABS suggests that the money was indeed income and added that if the Legislature intended for it to be, it would have stated so.

In Maurice v. The Queen, the issue involved whether or not attendant care money received by a mother for her disabled son under the SAAQ in Quebec, was taxable income. In his analysis, the judge in this case noted that the courts generally define the concept of business by contrasting it with the concept of employment.

He then referred to the decision in Wiebe Door Services Ltd. v. Minister of National Revenue, where a four-in-one test was used to decide a worker's status. Based on this test, the judge noted that the mother was neither an employee nor an independent contractor and thus, the money from attendant care benefits was not taxable.

While the Pellerin v. The Queen case was not an issue of self-employment, the arbitrator referred to one of the judge's comments in the case, which concerned a mother who was receiving attendant care money for her adult son. The judge in this instance stated, "This was in no way a business relationship or even an employment contract. The affection stemming from the parental bond was the primary and fundamental reason for the relationship".

While the arbitrator found the cases referenced by the applicant to be helpful, he rejected the insurer's reference to the Butts and Pembridge Insurance Company arbitration. In the latter, the arbitrator found that monies received by the applicant from the Children's Aid Society for fostering children was considered income for the purpose of quantifying the income replacement benefit. However, Arbitrator Fadel noted that the key issue to consider in that case was whether or not any given foster parent engages in the activity with an expectation of profit and the arbitrator in the case did believe that the applicant and his wife did regard foster care as a steady source of funding from which they could profit. However, there was no evidence in this case that the applicant regarded her attendant care of her son as a source of profit and in fact, the evidence suggested otherwise.

Although the arbitrator disagreed with the insurer that the monies received by the applicant for providing attendant care constituted post-accident income and were therefore not deductible from her IRB payments, he did not think the insurer was unreasonable in their interpretation of the rules pertaining to this issue. Therefore, the judge ruled against the applicant's request for a special award from the insurer. He did, however, rule that the applicant was entitled to any interest owing on overdue payments since the insurer had stopped providing IRB, as well as arbitration costs.

When an individual is catastrophically injured in a car accident that leaves them permanently incapacitated and requiring long-term care, this circumstance takes a significant toll not only on the accident victim, but also on their loved ones. This is particularly true when a family member becomes the primary caretaker for that individual.

In many cases, it is parents and most often, mothers, who take on the substantial responsibility of caring for a severely injured child, commonly sacrificing their free time and prior careers in this selfless act. For this reason, it is particularly important that family caregivers receive all the financial help they require.

At Gluckstein Lawyers, we have a long and successful history of helping victims of personal injury get the compensation they deserve and are owed. Call or visit our office if you or someone you love was seriously injured in an accident.

We can provide a free initial consultation, where we will discuss the specifics of your case and offer you the best legal options moving forward.


Subscribe to our Newsletter

Sign me up