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2018 Indexation changes

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Due to new legislation, the WSIB has changed the way we index and calculate certain benefits.



What is indexing?

Each year, we make a cost-of-living adjustment to help ensure benefit payments to workers and survivors keep pace with inflation. This is known as indexing.

 

Change

What is changing?

Changes for injured workers and survivors

Starting on January 1, 2018, we changed the way we index benefits by applying a single indexing factor – the Consumer Price Index – to the amount payable for all indexed benefit types. For 2018, the WSIB CPI is 1.5 per cent.

The factor

Under the previous annual indexing system, the indexing factor applied to most benefits, including partial wage-loss benefits, was usually lower than CPI, which was applied to most full wage-loss and survivors’ benefits.

For example, in 2017 people who received full Loss of Earnings benefits received a cost-of-living adjustment of 1.4 per cent to reflect the Consumer Price Index. Yet, those who received partial Loss of Earnings benefits from the WSIB, received an inflation adjustment of 1.0 per cent.

As of January 1, 2018, we are using the same factor for all indexed benefit types, so regardless of what type of benefit you are receiving you will receive a 1.5 per cent indexing adjustment in 2018.

The method

Under the previous system, each year, for most benefits the indexing factor was applied to gross pre-injury earnings and the benefit payment was recalculated. After January 1, 2018, the indexing factor is being applied to the benefit amount payable.

These changes increase fairness and simplicity by replacing the old system and applying CPI to the amount payable for everyone

Actuarial Tables

At the WSIB, we use actuarial tables to inform employers of future claims costs, calculate commutations, and calculate monthly Non-Economic Loss awards. We have updated the actuarial tables to reflect the changes to the indexing factor and method and to ensure we are using the most up-to-date information.

Read our FAQ about 2018 annual indexation below. If you have further questions, please call 1-800-387-0750 between 7:30 a.m. and 5:00 p.m.

Changes for those injured before 1990

If you were injured before 1990 there are some other indexation and calculation changes that may impact you:

  • If you receive the permanent disability supplement you no longer have the indexing of this supplement limited by the federal Old Age Security maximum. This supplement is also called the 147 (4) supplement.
  • For those who receive the permanent disability supplement additional amount and are eligible for federal Old Age Security, the additional amount is no longer potentially reduced due to federal Old Age Security. This supplement is also called the 147 (14) supplement.
These changes increase fairness for those who were injured before 1990
  • Learn more in the FAQ below.
 

Indexation update icon

New indexation policy and updates

 

To comply with, and support the implementation of new legislation, we have posted  the following policy updates:

  • one new indexation policy to explain when and how annual indexing occurs to ensure there is no information gap in the Operational Policy Manual now that the legislation is in effect.
  • revisions to 22 other policies related to Loss of Earnings, Future Economic Loss, Temporary Disability and Survivors benefits - these benefits all receive annual indexing so we are adjusting our policies to clarify that we will be indexing by the Consumer Price Index on the amount payable
  • revisions to four Permanent Disability policies to reflect the changes to how we index benefits and calculate certain supplements for people injured before 1990

We have also made consequential changes as a result of the legislation and/or housekeeping changes to 11 other policies.

These new and revised policies are in effect as of January 1, 2018.

View more details about these policy updates.

Learn more in the FAQ below.

 

FAQs

Frequently asked questions


General indexation

I received a letter advising me of a cost-of-living adjustment. What does this mean?

Every December and January, the WSIB mails annual indexing letters outlining any cost-of-living adjustment that will be made to benefits for the coming year. This helps ensure that benefits keep pace with inflation and maintain purchasing power.

The indexed benefit amount applies as of January 1, 2018.

Who determines the amount (or percentage) of the cost-of-living adjustment?

The CPI used is for the 12-month period ending in October every year and is determined by the federal government. Please note, that the indexing factor can’t be less than 0 per cent, even if CPI was less than 0 per cent.

What was the indexing factor I received last year vs. this year?

The table below is based on benefit type and shows what your benefit was indexed by in the past compared to under the new legislated indexing system. In 2017, CPI was 1.4 per cent and the TIF was 1.0 per cent. In 2018, all benefits will be indexed by CPI and this is 1.5 per cent.

 

Indexing factor in 2017

Indexing factor  as of 2018

Accident dates prior January 1, 1990 Inclusive

100% Permanent Disability Benefit

CPI

 

 

CPI

Less than 100% Permanent Disability Benefit

TIF

Permanent Disability Benefit Supplements

TIF

Temporary Total Disability Benefit

TIF

Temporary Partial Disability Benefit

TIF

Periodic Payments (Survivors’)

CPI

Accident dates on or after January 2, 1990 to December 31, 1997 inclusive

Temporary Total Disability Benefit

TIF

CPI

Temporary Partial Disability Benefit

TIF

100% Future Economic Loss (FEL) Benefit

CPI

Less than 100% FEL Benefit

TIF

FEL Supplements

TIF

Non-Economic Loss (NEL) Monthly

TIF

Periodic Payments (Survivors’)

CPI

Accident dates on or after January 1, 1998

100% Loss of Earnings (LOE) Benefit

CPI

 

CPI

Less than 100% LOE Benefit

TIF

NEL Monthly

TIF

Periodic Payments (Survivors’)

CPI

*CPI=Consumer Price Index

** TIF = Temporary Indexing Factor (usually a fraction of CPI)

Note: The benefits and amounts that were indexed by TIF in 2017 were indexed this way because of government regulation. Prior to 2018, legislation required these benefits and amounts to be indexed by modified Friedland (MF) unless the government prescribed a TIF by regulation.

What is my new Non-Economic Loss (NEL) or permanent disability benefit amount?

The percentage amount noted in your letter will be applied to the amount you were receiving in 2017. The increase is effective January 1, 2018.

When do these changes take effect?

As of January 1, 2018 we are applying CPI to the amount payable for all injured workers and survivors during the annual indexing process.

Policy changes to implement new indexation legislation

Why are you updating these policies?

The policies have been updated to comply with legislated changes to how we index and calculate certain benefits. The updates were necessary to ensure our policies are consistent with what is required in legislation.

For each updated policy, we have posted either a version with comment boxes or a track changes version so you can easily follow the changes. We have also posted an explanatory note (PDF) about the new policy and changes to provide more information about indexation and/or benefit calculation in 26 existing policies.

 

Why did you post the final policies instead of a draft for consultation?

As outlined in the WSIB Framework for Operational Policy Development and Renewal, when an amendment is made to the Workplace Safety and Insurance Act (WSIA) or an associated regulation, the WSIB is required to ensure the policies are consistent with the law and will make any policy revisions to achieve this as expeditiously as possible. As well, the amendments were very specific, meaning the WSIB has no authority to deviate from them, whether as a result of consultation or otherwise.

Why is there a new policy on indexation when there hasn’t been one in the past?

In the past there was no policy specific to indexation. This one new indexation policy explains when, and how annual indexing occurs to ensure there is no information gap in the Operational Policy Manual now that the new legislation is in effect.

Many of the updated policies now have a new section called “Escalation.” Is escalation something that is new?

Escalation is the method the WSIB uses to bring a worker’s pre-injury gross earnings up to current value when benefits need to be calculated or recalculated outside the earnings year. This is not new. The escalation content has been added to certain updated policies, where appropriate, to provide more information about benefit calculation in the Operational Policy Manual.

Why are you revising so many other policies?

Loss of Earnings, Future Economic Loss, Temporary Disability and Survivors benefits all receive annual indexing, so we are adjusting our policies to clarify that we will be indexing by the Consumer Price Index on the amount payable. There are 22 policies that need to be updated to reflect this.

Then, in addition, revisions to four Permanent Disability policies are required to reflect the changes to how we index benefits and also to how we calculate certain supplements for people injured before 1990. You can read more about these changes in the FAQ for people injured before 1990.

We have also made consequential changes as a result of the legislation and/or housekeeping changes to 11 other policies.

When do these new and updated policies come into effect?

These policies are in effect as of January 1, 2018.

Do any of these policy updates change outcomes for workers?

Many of the updated policies reflect the new legislated requirement to index ongoing benefits on the amount payable by the CPI, which is a change to how ongoing benefits are indexed.

Also, the updated policies that address the pre-1990 supplements comply with the legislated changes to how the federal Old Age Security benefit amount is used when paying these supplements.

For each updated policy, we have posted a version with comment boxes that explains the changes. We have also posted an explanatory note (PDF) about the policy changes.

If I have further questions who should I contact?

For more information on the policies, please email km@wsib.on.ca or phone 416-344-4355 or 1-800-387-0750, ext. 416-344-4355.

Why do some of the updated policies look different?

In addition to making changes to comply with the implementation of the legislated changes, changes were made to support implementation by adding more information about benefit calculation and making the policies more reader-friendly. Some of these changes made to make the policies more reader-friendly include the following:

  • reorganizing content so that it appears in a more sequential manner and so that similar content appears together;
  • simplifying existing content;
  • updating outdated terminology; and
  • using the current Operational Policy Manual template.

These types of revisions do not change current practices and they do not change outcomes for workers.

Pre-1990 indexation and calculation changes

What is the permanent disability supplement and what has changed with it?

The permanent disability supplement goes to people who were injured before 1990 and who receive the permanent partial disability benefit and meet certain eligibility criteria. This is also referred to as the 147 (4) or Old Age Security supplement.

Previously, the maximum amount for this supplement was the federal Old Age Security monthly amount. The exact amount paid depends on a person’s situation and claim limit.

The legislative changes have removed this limit for the purpose of indexing the benefit payment.

Will those receiving the permanent disability supplement (PD supplement) still receive increases quarterly when the federal OAS goes up?

Before January 1, 2018, those receiving the PD supplement may have received quarterly increases if the federal Old Age Security (OAS) went up.

There are no longer quarterly indexation increases because people are receiving the fully indexed amount at the beginning of each year.*

In the past, the PD supplement could not exceed the quarterly federal OAS amount therefore we could not always provide the fully indexed PD supplement amount at the beginning of each year. Each quarter as the federal OAS amount was raised, we could also increase the PD supplement.

Now, we will fully index the PD supplement by the Consumer Price Index (CPI) on January 1st of each year, even if it is above the federal OAS amount. So, those receiving the PD supplement will receive full CPI indexing for the whole year instead of waiting for potential increases each quarter.

*It is important to note that for new supplements or claims with a material change, on or after January 1st of that year, people may still receive quarterly adjustments to their supplement payments until the following January 1st. After that, the supplement amount payable will be indexed once at the beginning of the year.

For example, if someone starts receiving a new PD supplement or experiences a material change on April 5, 2018, they may receive an increase to their PD supplement in July 2018 and October 2018 if the federal OAS amount increases. Then, on January 1, 2019 the PD supplements amount payable will be indexed by CPI and they will receive stable monthly PD supplement payment going forward for 2019.

What is the permanent disability supplement additional amount and what has changed with it?

The permanent disability supplement additional amount goes to workers who were injured before 1990 who are receiving permanent partial disability benefits (or received a lump sum commuted from such an amount) and who are eligible to receive the permanent disability supplement- or would be eligible if they weren’t receiving federal Old Age Security. It is awarded if they still have claim room. This is also referred to as the 147 (14) or Bill 165 supplement.

Previously, when someone received the permanent disability supplement additional amount and became eligible for federal Old Age Security, and this put them above their claim limit, they received a reduction to the additional amount.

The legislative changes mean that there are no longer reductions to this supplement because of federal Old Age Security eligibility. This supplement is still limited by a person’s claim limit.

Will PD supplement additional amounts still be potentially reduced each quarter when someone becomes eligible for Federal OAS?

As a result of legislative change, when someone becomes eligible for federal OAS we will no longer use the federal OAS amount to calculate the PD supplement additional amount. In these circumstances, there will no longer be a reduction to the PD supplement additional amount.

Who will be eligible for retroactive payments?

Workers who are entitled to the permanent disability supplement additional amount on, or after, April 27, 2017, and whose permanent disability supplement additional amount payment was previously reduced (including being reduced to $0) may be eligible for retroactive payments upon request.

How can people who are eligible get retroactive payments?

The legislation mandates that those who want retroactive payments must make a request. If you want to know if you are eligible you can call us. We will track your request and contact you once your claim is reviewed.

I requested a retroactive payment of my PD supplement additional amount and I haven’t heard back yet. When will I have a response?

The legislative changes in effect as of January 1, 2018 impacted a large volume of claims and we are currently working through the requests we have received. We apologize for any delay and will address your request as soon as possible. We will inform you once this has been reviewed. Thank you for your patience.

 

Glossary

Key terms

Amount payable – The amount payable is the value to which we will apply the indexing factor as of January 1, 2018. It is also known as the benefit rate.

Consumer Price Index (CPI) - The CPI is found by comparing, over time, the cost of a fixed selection of goods and services. For the purpose of indexing, the WSIB uses the percentage change in CPI for a 12-month period ending on October 31 of the previous year as published by Statistics Canada.

Indexing - Indexing is the process through which the WSIB makes an annual adjustment to workers’ and survivors’ benefit payments every year. Indexation is intended to protect workers’ and survivors’ benefit payments against the effect of inflation over time.

Indexing factor – The indexing factor is the per cent increase applied to adjust benefits each year on January 1st. The indexing factor for all benefits is CPI as of January 1, 2018.

Indexing method - The indexing method is the process we use when making an annual adjustment to workers’ and survivors’ benefit payments. Prior to 2018, for most benefits, we applied the indexing factor to gross earnings and recalculated the benefit. As of January 1, 2018, we are indexing all benefits by applying the indexing factor to the actual amount payable.

Inflation - Inflation is the rate at which the general level of prices for goods and services increases, which leads to the purchasing power of money declining. Factors, such as CPI, are used to show the rate of inflation. The WSIB adjusts benefit payments annually, in a process known as indexing, to help ensure that benefit payments maintain their purchasing power.

Permanent disability supplement - The permanent disability supplement goes to people who were injured before 1990 and who receive the permanent partial disability benefit and meet certain eligibility criteria. This is also referred to as the 147 (4) or Old Age Security supplement.

Permanent disability supplement additional amount - The permanent disability supplement additional amount goes to workers who were injured before 1990 who are receiving permanent partial disability benefits (or received a lump sum commuted from such an amount) and who are eligible to receive the permanent disability supplement - or would be eligible if they weren’t eligible to receive federal Old Age Security. It is awarded if they still have claim room. This is also referred to as the 147 (14) or Bill 165 supplement.











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