Understanding the Silo Approach for Calculating Damages: The Deductibility of Non-Earner benefits in tort actions

By: Michael Blinick, Partner & Dylan Zamani, Articling Student


Can Non-Earner Benefits (“NEBs”) be deducted from a claimant’s awarded damages for income loss in a tort action? In the recent decision of Kolapully v Myles (2024 ONCA 350), the Ontario Court of Appeal reversed the trial judge’s ruling, finding that NEBs under the Statutory Accident Benefits Schedule (“SABS”) should be deducted from the damages awarded to the claimant for past loss of income under s. 267.8 of the Insurance Act.

Summary of Decision

Shoba Kolapully (the “injured person”) was struck by a Toronto Transit Commission bus (“the TTC”) on March 6, 2012. On Dec 3, 2013, the injured person initiated an action for general and specific damages as against the TTC, claiming she suffered serious and permanent physical and psychological injuries as a result of the accident. The injured person also initiated a proceeding before the LAT, where she was found to be catastrophically impaired and entitled to NEBs in accordance with the SABS.

Upon completion of a 6-week trial, the injured person was awarded $175,000 in non-pecuniary damages and $200,000 in damages for past loss of income. The trial judge, relying on the decision of Walker v Ritchie (2005), 197 O.A.C. 81 (C.A.). (“Walker”), ruled that NEBs received from the AB insurer (approximately $95,000) are not related to loss of income, and should not be deducted from a tort award for loss of income under s.267.8(1) of the Insurance Act.  

The TTC appealed the decision, stating that the trial judged erred by not deducting NEBs from the past loss of income award in the tort action, amongst other grounds of appeal. The TTC argued that the Court of Appeal decision in Cadieux v Cloutier (2018 ONCA 903) (“Cadieux”), is in direct conflict with Walker, as the court in Cadieux listed NEBs in the category of “income replacement benefits”.

The Court of Appeal in the subject case agreed with the Cadieux court’s treatment of NEBs, finding that NEBs and income replacement benefits are interrelated and belong in the same income replacement silo. The Cadieux court replaced the “apples to apples” approach (meaning statutory accident benefits were only deductible based on a precise matching of individual benefits with identical heads of damages) with the silo approach where all statutory accident benefits that fall within the same broad category and deducted from the damages that are awarded in the corresponding broad category. 

As the Court of Appeal stated, “Non-earner benefits belong in the income replacement silo precisely because the legislature has signaled that they are an alternative to other benefits in that silo. Far from revealing dissimilarity, the substitutability of the other benefits for non-earner benefits reinforces the view that they are interrelated and therefore belong in the same income replacement silo”.[1]

Further, additional support was provided for the finding made by the Cadieux court that the proper interpretation of the current version of s. 267.8 “does not support matching at a more particular level than the three silos of income loss, health care expenses and other pecuniary loss”.[2] The silos are described at paras. 12-14:[3]

There are three broad categories of SABs under the Insurance Act and the Statutory Accident Benefits Schedule, O. Reg. 34/10. The first category provides income replacement benefits or, if the person was not employed at the time of the accident, “non-earner” benefits, or “caregiver benefits”, if they provided caregiver services to another person at the time of the accident.

The second category is health care benefits. “Health care” is a defined term in s. 224(1) of the Insurance Act. It “includes all goods and services for which payment is provided by the medical, rehabilitation and attendant care benefits provided for in the Statutory Accident Benefits Schedule”…

The third category of benefits addresses “other pecuniary loss”, which includes lost educational benefits, expenses of visitors and housekeeping, and home maintenance expenses.

The Court of Appeal concluded that the Walker decision was overruled by Cadieux, and that the inclusion of NEBs in the income loss silo mentioned in Cadieux was authoritative and therefore binding on the trial judge. As a result, the Court of Appeal found that the trial judge was required to deduct the injured person’s NEBs (around $95,000) received under the SABS from the past income loss award since NEBs belong in the income replacement silo.

Future Implications

This Court of Appeal decision is a reminder for tort defendants and their insurers to be cognizant that NEBs are in the silo of income replacement benefits, and therefore are deducted from a tort income loss award. The “apples to apples” approach that was previously being applied pre-Cadieux has shifted to the “silo” approach and further confirmed by the Court of Appeal in this decision.

Insurers should also be mindful of the fact that a claimant who has been involved in an accident after June 1, 2016, will only be entitled to a maximum of $185/week for 104 weeks with a 4-week waiting period (maximum $18,500). As a result, the timing of the accident is important since a claimant who suffered “a complete inability to carry on a normal life” as a result of an accident that occurred prior to June 1, 2016, was entitled to NEBs beyond 104 weeks, with a set formula re-adjusting the benefit at the age of 65. In the underlying appeal, the injured person was deemed catastrophically impaired and awarded around $95,000 for NEBs for an accident that occurred in 2012, a significant difference from the maximum amount payable to a claimant today.

Given the foregoing, insurers that find themselves in a similar position where the claimant has been paid NEBs for an accident that occurred before June 1, 2016, should be even more mindful of the deduction available if the claimant is later awarded damages for income loss in the tort action.

It is also important to note, as the Court of Appeal highlighted, that statutory accident benefits are never to be deducted from general damages for pain and suffering in a tort action. As the Court of Appeal stated in their decision, “the key principle is that the deduction from the tort pecuniary damages award is confined to the apposite silo”.[4]


[1] Kolapully v. Myles, 2024 ONCA 350, at para 79.

[2] Cadieux v. Cloutier, 2018 ONCA 903 (CanLII), at para 85

[3] Ibid, at para 12-14

[4] Kolapully v. Myles, 2024 ONCA 350, at para 67.