Just about every country in the world is grappling with soaring prices. And what makes current inflation rates so unusual is the breadth of price pressures, from food and energy to housing and technology. The global rate of inflation clocked in at roughly 9% last year and is driving people far and wide into poverty. For many developing countries, high inflation is a recurrent challenge, but the last time persistent inflation was so elevated in rich countries was the early 1980s.
As an injured worker in Alberta, you might be feeling the pinch of these inflationary pressures, especially when it comes to understanding how your Economic Loss Payments (ELP) are being adjusted for inflation. With changes brought about by Bill 47, it’s crucial to be aware of how these adjustments might impact your financial well-being. In this post, we’ll break down the differences between the old and new systems and highlight the potential consequences of receiving inadequate cost-of-living adjustments (COLA).
The Shift from Bill 30 to Bill 47
When Bill 30, An Act to Protect the Health and Well-being of Working Albertans, was in effect, ELPs were indexed according to Alberta’s Consumer Price Index (CPI). This method helped ensure that your benefits kept pace with inflation and maintained their purchasing power.
However, the introduction of Bill 47, the Ensuring Safety and Cutting Red Tape Act, 2020, changed the way COLA is calculated for ELPs. Instead of being tied to the Alberta CPI, the WCB Board of Directors now determines the annual COLA adjustments. While this change was meant to provide more financial flexibility for the WCB, it also raised concerns about how it could affect injured workers’ benefits in an era of rising inflation.
The Financial Impact of Inadequate COLA adjustments
To illustrate the potential financial consequences of receiving an inadequate COLA adjustment, let’s compare a worker under Bill 30 who wrongly receives a 1% COLA instead of a 6% adjustment over one year, and then over ten years, assuming a continuation of a persistent 6% inflation rate.
Imagine you’re an injured worker receiving an ELP of $50,000 per year. If you received the appropriate 6% COLA, your ELP would increase to $53,000 after the first year. But if you only got a 1% COLA, your ELP would increase to just $50,500 – a difference of $2,500.
Over ten years, the financial impact of receiving inadequate COLA adjustments compounds. Assuming a constant 6% inflation rate, you should receive a total of $637,009 in ELPs over ten years. But if you continue to receive only a 1% COLA, your ten-year total drops to just $545,107 – a significant difference of $91,902.
What you can do if you’re being shortchanged
If you think your COLA adjustments aren’t being handled correctly, it’s important to take action. Blue Collar Consulting is here to help injured workers like you navigate the complexities of the WCB system and ensure you receive the benefits you deserve.
In conclusion, it’s essential for injured workers who were hurt on the job while Bill 30 was in effect to keep a close eye on their ELP adjustments. Make sure you’re receiving the appropriate COLA based on Alberta’s CPI. With thousands of dollars potentially at stake, don’t hesitate to reach out to Blue Collar Consulting for assistance and support in addressing any discrepancies and securing your financial future in a world of rising inflation.