The WSIB is changing the way we index and calculate certain benefits.
What is indexing?
Each year, we make a cost-of-living adjustment to ensure benefit payments to workers and survivors keep pace with inflation. This is known as indexing.
What is changing?
Changes for injured workers and survivors
When we index benefits each year we will apply the consumer price index (CPI) to the amount payable for all benefit types, including both full and partial wage-loss benefits.
Currently, the indexing factor applied to most benefits, including partial wage-loss benefits, is usually lower than the CPI, which is applied to those receiving full wage-loss and survivors’ benefits. After January 1, 2018, we will use CPI for everyone.
Currently, each year, for most benefits the indexing factor is applied to gross pre-injury earnings and the benefit payment is recalculated. After January 1, 2018, the indexing factor will be applied to the benefit amount payable.
For example, if a benefit payment amount is $500 per week and the indexing factor is 2 per cent, the indexed benefit payment amount will be $510 per week.
The upcoming changes will increase fairness and simplicity by replacing the old system and applying CPI to the amount payable for everyone.
We will also be updating the actuarial tables we use to coincide with the implementation of these changes. At the WSIB, we use actuarial tables to inform employers of future claims costs for survivors’ benefits, calculate commuted lump sum awards, and calculate monthly Non-Economic Loss awards. We will be updating these tables to reflect the changes to the indexing factor and method and to ensure we are using the most up-to-date information.
Changes for those injured before 1990
If you were injured before 1990 there are some other indexation and calculation changes that are coming up that may impact you:
- If you receive the permanent disability supplement you will 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 will no longer be potentially reduced due to federal Old Age Security. This supplement is also called the 147 (14) supplement.
These changes will increase fairness for those who were injured before 1990
When do these changes take effect?
On January 1, 2018 we will begin applying CPI to the amount payable for all injured workers and survivors during the annual indexing process.
By December 31, 2017 we will implement the changes related to permanent disability supplement additional amount for workers injured before 1990.
New indexation policy and updates
To comply with, and support the implementation of, this new legislation, in November, we will be posting:
- One new indexation policy to explain when and how annual indexing occurs to ensure there is no information gap in the Operational Policy Manual after the legislation goes into 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 and calculate certain supplements for people injured before 1990.
We will be sharing these policies early to allow you time to familiarize yourself with the details before they go into effect.
In the New Year, we will be posting some other minor revisions and housekeeping changes needed to comply with the legislation.
Please stay tuned for these new and revised policies that will take effect on January 1, 2018.
Frequently asked questions: Pre-1990 indexation and calculation changes
What is the permanent disability supplement and what is changing 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.
Currently, the maximum amount for this supplement is the federal Old Age Security monthly amount. The exact amount paid depends on a person’s situation and claim limit.
The legislative changes will remove this limit for the purpose of indexing the benefit payment.
Will permanent disability supplement earners still receive increases quarterly as the federal Old Age Security goes up?
In the past, those receiving this supplement may have received quarterly increases if the federal Old Age Security went up. This is because the federal Old Age Security is indexed each quarter, and the supplement was limited by the Old Age Security maximum. So, if the Old Age Security went up, the supplement could go up as well as long as there was claim room.
Now because there will not be any limit by the Old Age Security at the time of indexation, the amount will just be indexed once at the beginning of the year. So workers will receive the full value of WSIB indexing for the full year and don’t need to wait for the Old Age Security limit to go up to receive an adjustment to allow for more indexing.
What is the permanent disability supplement additional amount and what is changing 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.
Currently, when someone receiving the permanent disability supplement additional amount becomes eligible for federal Old Age Security and this puts them above their claim limit they receive a reduction to the additional amount.
The legislative changes mean that there will no longer be reductions to this supplement because of federal Old Age Security eligibility.
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 says 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 however will be unable to action it until after December 31, 2017 when the legislation goes into effect. Our staff will contact you directly in early 2018 when your request is being reviewed.
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 will be CPI starting January 1, 2018.
Indexing method - The indexing method is the process we use when making an annual adjustment to workers’ and survivors’ benefit payments. Currently for most benefits, we apply the indexing factor to gross earnings and recalculate the benefit. As of January 1, 2018, we will index 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.