Facing the Shock of ELP Adjustment at Age 65
Imagine the moment: On the brink of what many envision as the golden years of retirement, you receive a letter that hits like a freight train. For many disabled workers, this letter from WCB, arriving as they approach or celebrate their 65th birthday, unveils a substantial curtailment to their Economic Loss Payments (ELP).
Suddenly, the stable retirement they anticipated is shrouded in uncertainty. The revelation triggers a cascade of emotions: disbelief quickly turning into confusion, then escalating to indignation. ‘How can benefits we thought were permanent end at 65?’ is a question echoed by many. Affected workers frequently highlight how their disabilities limited their ability to contribute to the Canada Pension Plan and other retirement savings, deepening the sense of unfairness. Moreover, with wage-loss benefits covering only 90% of pre-injury earnings, they’ve been living on lesser and fixed income in a highly inflationary environment. So let’s explore what this means, why it happens, and how you, as a claimant, can assert your rights and secure your future.
What does WCB’s policy have to say?
To help clarify the situation, let’s review the section of WCB policy relevant to economic loss payments:
At retirement, the impact on earning capacity is reduced as wages are replaced by pension/retirement income. The ELP is adjusted to reflect the changed earning capacity by using a formula similar to that used for standard retirement pensions. Age 65 is commonly considered to be normal retirement age, and the ELP will be adjusted when the worker reaches age 65 unless there is sufficient and satisfactory evidence to show that the worker would have continued to work past that age if the injury had not occurred.
What this means is that most workers should just expect an ELP adjustment at age 65. However, exceptions can be made if compelling and adequate evidence is presented, indicating that the worker had intentions and the capacity to extend their employment beyond this age had the compensable injury not taken place.
The policy then poses the following question:
What is considered sufficient and satisfactory evidence that a worker would have continued to work past age 65?
In response:
As with any adjudicative issue, the decision will be made on the balance of probabilities. Workers are not required to provide absolute proof, however, there must be some independent evidence that the worker intended to work after age 65, and would have done so if not for the compensable injury. Examples of satisfactory independent evidence include:
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confirmation from the worker’s accident employer, union, or other independent employment source that the worker had planned to continue after age 65 and employment was available
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continued employment post-age 65 at the same level and earnings as pre-age 65 [for example, a 51 year old worker with compensable permanent work restrictions returns to work with reduced earning capacity and is paid an ELP. The worker continues to work at that level (same type of work, same hours) until age 69]
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continued employment post-age 65 at reduced earnings, when it is clear that the further reduction is due to a deterioration of the compensable work restrictions, rather than a personal choice of semi-retirement. WCB will also consider any other relevant factors such as the normal retirement age for workers in the same pre-accident occupation.
Proving intention
Simply put, for WCB to consider extending an ELP benefit beyond the typical retirement threshold, they require proof of plans to work beyond age 65 made before the injury. A common form of such evidence is a home mortgage initiated pre-injury that is scheduled for repayment well into retirement years. Holding significant debt with a payoff timeline extending beyond age 65 suggests to WCB a plan to continue working past traditional retirement age. However, it’s not just about mortgages; WCB acknowledges various indicators of a worker’s intent to delay retirement, including but not limited to:
Employment Contracts or Agreements: Documentation showing an employment agreement with a term exceeding age 65.
Industry Standards: Documentation or statistical evidence showing that it’s typical for individuals in the worker’s profession to work beyond the typical retirement age.
Written Retirement Plans: Personal or employer-provided retirement plans or statements indicating a retirement age later than 65.
Employer Confirmation: A letter or statement from an employer or union confirming discussions or plans for the worker to remain employed beyond age 65.
Professional Development: Records of recent participation in professional development, certification programs, or continuing education courses, suggesting investment in a career beyond the age of 65.
Business Investments: Evidence of significant investments in a business or workplace, such as purchasing equipment or funding expansions, indicating plans to continue working.
Deferred Retirement Plans: Documentation of deferred pension or retirement benefits, indicating intent to retire later than age 65.
Financial Planning Documents: Financial plans or advisories that account for income beyond age 65, indicating an expectation to continue working.
Work History: A consistent work history without periods of extended leave or previous attempts to retire, suggesting an ongoing commitment to working.
Key Points
A couple key points to underscore here. WCB is disinterested in post-injury intention, as their focus will be limited to your pre-injury state of affairs. For instance, if you secure a mortgage after you become disabled, the Board will exclude this evidence from consideration when evaluating eligibility for ELP extension. Secondly, the Board can be narrowminded in regarding a mortgage as the only relevant factor, when in reality, a pre-existing property loan is just one of many indicators that can demonstrate a worker’s plans for their retirement years.
Take John Doe for instance, a 63-year-old journeyman electrician, had never seen retirement as an endpoint to his career. Despite nearing the traditional retirement age, John actively participated in union workshops and certification renewals, showcasing his commitment to staying updated with the latest electrical codes and safety protocols. His decision was driven by a genuine love for his craft and the camaraderie he shared with his colleagues on the construction sites.
Moreover, John had a verbal agreement with his long-time employer, a local construction company, confirming his intention to continue working until at least age 70. This agreement was based on John’s unmatched expertise and the mentorship role he played for apprentices. The company valued his dedication and had plans for him to lead several upcoming high-profile projects, which John was excited about, demonstrating a clear mutual expectation for his continued employment beyond age 65.
Now, supposing you provide evidence of intention to keep working, it may still not be enough to persuade the Board. In these cases, you can always appeal. But because these disputes often become messy, you’re well advised to reach out to an experienced WCB representative like those at Blue Collar Consulting.
Calculating Your Benefits Post-65
You might also wonder how much your benefit payment will drop after age 65, assuming the ELP isn’t extended. WCB will pay an annual retirement benefit in an amount equal to 2% of the worker’s total wage loss compensation. Total wage loss compensation is the sum of all wage loss benefits paid from the date of accident up to the month in which the worker reaches retirement age. The annual retirement benefit will normally be payable in twelve equal monthly payments for the lifetime of the worker but may be commuted to a lump sum.
Here’s an example:
- You were 55 years old when you were injured in 2018.
- After you returned to work you received an ELP of $48,300/yr.
- It is now 2028. You are 65 years old and decide to retire.
Thus you received a total of $483,000 in wage loss benefits from 2018 – 2028. $483,000 (Total amount of benefits paid for the duration of your claim) x 2% = $9,660/yr. In this hypothetical scenario, you could expect your pre-retirement benefits to fall from $4,025/mo to $805/mo. We should also point out that claimants who receive an ELP are entitled to a minimum 5 years of benefits if they’re injured when they’re aged 60 or later.
Reach out to Blue Collar Consulting today for expert advice if you or someone you know is facing a retirement adjustment to an ELP benefits.
