What can a real-life case teach us about non-arms length employees, IRBs, and deductibility?

August 01, 2019

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On January 4, 2013, an employee of a restaurant owned by her mother endured a motor vehicle accident that left her unable to work for a period of time, even though she continued to receive her regular pay. With the parent claiming this pay was a gift, Aviva Insurance Canada classified it as post-accident income and deducted accordingly from the employees income replacement benefits (IRB).

The dispute over classification of money received from an employer post-accident forms the basis of a complicated case and some key learnings including: 

  • What constitutes a monetary ‘gift’ between employer and employee
  • The relevance of whether or not an employer has a disability policy in place
  • How Temporary Disability benefits are defined
  • When payments can and cannot be considered Other Income Replacement Assistance
  • How the adjudicator in this case made their judgement
 
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