When a worker is granted a permanent disability award, and it is worth more than $200 per month or a 10% disability rating, the award will generally be paid monthly until the worker turns 65 years old. Many of our clients ask if it is possible to receive a larger “settlement” or a payment upfront, instead of receiving smaller monthly payments. While WCB does not grant “settlements” per se, in special circumstances, they can provide an up-front payment instead of monthly disability award payments. This is called a “commutation”.
WCB award commutations have very specific rules, and they are rarely granted. The following is a brief summary of WCB’s rules regarding commutations:
- A commutation must be for a specific purpose. Permitted purposes include: funding a business; education; and buying a home. Investing in one’s own business may be considered in the worker’s best interests where there is a strong element of rehabilitation, and the worker will actively participate in operating the business. Investing and paying off debts are not permitted purposes.
- A commutation will usually only be allowed for purposes that are calculated to enhance the income position of the worker.
- The applicant must have a stable source of income other than their permanent disability benefits.
One of the more common purposes for commutation applications is buying a home. Under WCB policy, commutations for purchasing a home may be allowed under the following conditions:
- The home is purchased as a personal residence.
- The worker will obtain clear title to the property subject only to any mortgage.
- Any mortgage payments are well within the worker’s ability to pay from other income.
- The size, value and upkeep costs of the home are in line with other income.
To start the commutation process, a worker can ask WCB to provide them with an application form. Our office does not assist with applications, since this information would come from the worker. However, if your commutation application is denied, our office can assist with appealing the decision to the Review Division. For commutations, the Review Division is the last level of appeal. As such, it is important to put your best arguments forward in light of the law and policy, when appealing a commutation denial decision.
For further information or if you would like to schedule a free consultation, please call our office at (604) 591-8187 or visit our website at www.wcblawyers.com.
