Adjusters must ensure claimant is paying income tax before approving IRBs

It is important for adjusters to determine whether or not a claimant has been scamming Revenue Canada when considering the claimant’s entitlement to income replacement benefits (IRBs), according to Donna Ford, an investigator with Northwood & Associates.
“If a person is trying to cheat an insurer with respect to an IRB claim, you can almost be sure, based on my experience, that they are also trying to cheat [Revenue Canada],” Ford told delegates at the Annual Toronto Fraud Forum on Sept. 29.
Section 4(5) of the Statutory Accident Benefits Schedule (SABS) has been added in the new regulations, which became effective Sept. 1, 2010. This section codifies the serious consequences of a claimant’s failure to pay income tax, Ford said.
If a person fails to pay income tax, according to section 4(5), “the person’s income before an accident shall be determined for the purposes of this part without reference to any income the person has failed to report contrary to that act or legislation.”
If adjusters have any questions about the legitimacy of an IRB claim, they should ask for the income tax returns with enclosures and notices of assessment.
“An honest claimant won’t have any problem giving you that information,” Ford said.