Tuesday, August 9, 2016

Adequacy of wage-replacement benefits for injured workers

The Institute for Work and Health issued a new study this spring that looked at the adequacy of workers’ compensation benefits in Ontario. The original intent of workers’ compensation was (in part) to prevent workers from experiencing a catastrophic loss of income due to their injury (although I acknowledge that this is a contested assertion).

Looking at permanently disabled workers who were injured between 1998 and 2002, the IWH study found that these workers had (on average), full compensation for wage losses when compared to a control group. That said:
… there is some variation around the average in the earnings replacement rates. About 46 per cent of the sample had replacement rates of 100 per cent or more, while 25 per cent had replacement rates of under 75 per cent… .
What this means is that some of these injured workers did not see their wage-loss fully replaced by the various benefit programs (e.g., workers’ compensation benefits, Canada Pension Plan disability benefits). Ontario’s target was to ensure injured workers had an earnings replacement rate of at least 85%--a goal achieved for only 65% of the injured workers in the sample.

-- Bob Barnetson

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