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Loss of Earnings Pensions Past Age 65

2000/01/21-03

THE WORKERS' COMPENSATION BOARD OF BRITISH COLUMBIA

RESOLUTION OF THE PANEL OF ADMINISTRATORS

RE: Loss of Earnings Pensions Past Age 65

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WHEREAS:

Pursuant to Section 82 of the Workers Compensation Act, RSBC 1996, Chapter 492 and amendments thereto, the Panel of Administrators ("Panel") must approve and superintend the policies and direction of the Workers' Compensation Board ("Board"), including policies respecting compensation, assessment, rehabilitation and occupational safety and health, and must review and approve the operating policies of the Board;

AND WHEREAS:

Section 23(3) of the Workers Compensation Act provides for the projected loss of earnings method of calculating a permanent partial disability pension;

AND WHEREAS:

The Board's policy on the duration of a projected loss of earnings pension is provided in policy item #40.20 of the Rehabilitation Services and Claims Manual;

AND WHEREAS:

Policy item #40.20 of the Rehabilitation Services and Claims Manual applies a mandatory retirement age to the payment of pensions established under Section 23(3) of the Workers Compensation Act;

AND WHEREAS:

As a result of various Appeal Division decisions, policy item #40.20 of the Rehabilitation Services and Claims Manual requires clarification with respect to its application;

AND WHEREAS:

The Board has adopted a practice to specify that age 65 is the presumed retirement age and may be rebutted to avoid possible injustice;

AND WHEREAS:

The Policy Bureau has consulted with the Policy Development Consultative Committee on the matter;

THE PANEL OF ADMINISTRATORS RESOLVES THAT:

1. Policy item #40.20 of the Rehabilitation Services and Claims Manual is amended to clarify that the Board considers age 65 to be the standard retirement age. The policy is also amended to clearly state that a projected loss of earnings pension may be awarded or continued in whole past the standard retirement age. In these situations, clear and objective evidence will be required to show that the worker would have continued to work past the standard retirement age if the compensable injury had not occurred.

2. The amendments to policy item #40.20, as attached, are approved.

3. The amended policy item #40.20 is effective on April 1, 2000, and will apply to all pensions adjudicated by a Board officer or appeal body on or after that date.

DATED at Richmond, British Columbia, March 16, 2000.

DON COTT, CHAIR
PANEL OF ADMINISTRATORS

	By the Workers' Compensation Board

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APPENDIX 1

REHABILITATION SERVICES & CLAIMS MANUAL
[Deletions Struck Through, Additions in Bold Italics]

#40.20 Duration of Projected Loss of Earnings Pension

Pensions assessed on a physical impairment basis are, under the terms of Section 23(1), payable for life. It was suggested that projected loss of earnings pensions should also be payable for life in every case, but the Board does not accept this. Section 23(3) does not specifically require this, but rather gives the Board a discretion in the matter. Compensation is only payable under Section 23(3) "Where the board considers it more equitable". Since the section authorizes the Board to calculate a worker's actual loss of earnings resulting from the injury, it is reasonable for the Board to have authority to terminate benefits payable under the section at a time when, even if not disabled because of the compensable injury, the worker would not have been working.

The situation where this issue arises is when the worker reaches retirement age. The Board considers age 65 years to be the standard retirement age. Any direct loss of earnings the claimant worker suffers because of the compensable disability will normally cease at that time. However, the Board does not, in practice, feel this is an automatic reason for terminating a projected loss of earnings pension. Rather, it is recognized because of the compensable disability, the claimant worker may be less able to accumulate retirement benefits. The Board, therefore, allows the projected loss of earnings pension to continue in whole or part past the standard age of retirement where the worker was under 65 years of age at the time of the injury. The portion of the pension so continued depends on how close the worker was to the age of 65 years, the assumption being that the older the worker, the less the ability to build up retirement benefits would be affected by the injury. The age of 65 years is set as the age of retirement used in all cases. To some degree, this is an arbitrary figure, but it is felt to be preferable to having to decide in each case the date of a person's retirement. This would often be a difficult and speculative process.

The following principles apply: are effective from April 18, 1985.

1. Where, at the date of injury, the worker is at or below the age of 50 years, the pension is established based on the higher of the physical impairment and projected loss of earnings assessment, and the pension so established, unless modified on a review, is payable for life.

2. Where, at the date of injury, the worker is at or above the age of 65 years, the pension is will usually be established by the physical impairment method, and that pension is payable for life. No projected loss of earnings pension is awarded unless clear and objective evidence is presented that the worker would have continued to work past age 65 if the injury had not occurred. Where a projected loss of earnings pension is awarded, it will cease when the worker reaches retirement age, as determined by a Board officer, and compensation will thereafter be established by the physical impairment method.

3. Where, at the date of injury, the worker is in the age range of 51 to 64 years, and where a pension calculated by the projected loss of earnings method is payable, the pension so calculated, unless modified on a review, will usually continues until the age of 65 years. From the age of 65, the pension is at a rate calculated by the physical impairment method, plus a proportion of the difference between the two methods according to the following table.

Age at Date of Injury	Proportion of Difference Between Two Methods
51 52 53 54 55 56 57 58 59 60 61 62 63 64	14/15ths 13/15ths 12/15ths 11/15ths 10/15ths 9/15ths 8/15ths 7/15ths 6/15ths 5/15ths 4/15ths 3/15ths 2/15ths 1/15th




The revised pension commences on the first day of the month following the claimant's worker's 65th birthday.

Where the projected loss of earnings pension is assessed following a recurrence of disability, the age at the date of the recurrence is used for the purpose of the above principles.

In cases where the worker presents clear and objective evidence that he or she would have worked past age 65 if the injury had not occurred, the projected loss of earnings pension may continue in whole past that age. In these situations, the formula provided in the table above does not apply. From the age of retirement, as determined by a Board officer, compensation will be established by the physical impairment method.

4. Where an injury occurs in the age range 51-64 years, and full wage-loss payments are made from the date of injury up to or beyond the worker's 65th birthday, a pension will usually be established by the physical impairment method, and that pension will be payable for life.

   A projected loss of earnings pension may be awarded if the worker presents clear and objective evidence that he or she would have worked past the standard retirement age had the injury not occurred. In these situations, the projected loss of earnings pension will cease when the worker reaches retirement age, as determined by a Board officer, and compensation will thereafter be established by the physical impairment method.

   In calculating a worker's projected loss of earnings, no account is taken of any disability or retirement pensions received from the employer to which the worker has contributed or any other source than the Board. However, the Adjudicator in Disability Awards a Board officer may take into account the fact that the claimant worker has retired or is about to retire in deciding whether there is a projected loss of earnings in the first place. The formula set out above only applies when it has been determined that there is such a loss and the pension is assessed on the basis of that loss.