Consumer Price Index (CPI) – Annual Indexing
Effective date: January 1, 2014
Application: All annual reviews on and after the effective date.
Policy subject: Benefits - General
To provide the process for adjusting compensation in accordance with annual CPI percentage increases.
- Section 69(1) of The Workers’ Compensation Act, 2013 (the “Act”) states that the “calculation of the loss of earnings for the purposes of subsections 32(2) and 68(1) and Sections 71 and 72 must be based on the difference between:
- the worker’s average weekly earnings at the commencement of the worker’s loss of earnings resulting from the injury, adjusted annually by the percentage increase in the Consumer Price Index; and
- the weekly earnings that the worker is receiving from employment.”
- Section 69(2) of the Act states “for the purposes of subsection (1), the percentage increase in the Consumer Price Index must be the percentage increase for the 12 months ending on November 30 in each year, and that percentage increase must be applied to the average weekly earnings of the worker on the anniversary date of the commencement of the worker’s loss of earnings resulting from the injury in the year following the year in which the calculation is made.”
- Section 69(3) of the Act states “notwithstanding subsections (1) and (2), if the result of an adjustment pursuant to clause (1)(a) is to make the worker’s average weekly earnings for a year greater than one fifty-second of the maximum wage rate for that year, the worker’s average weekly earnings must be set at one fifty-second of the maximum wage rate.”
- Section 72 of the Act states that “if an injured worker returns to full employment and afterwards suffers a recurrence of the injury, the compensation payable to the worker must be based on the positive difference, if any, between:
- the amount that is the greater of:
- the worker’s weekly earnings at the time of the commencement of the worker’s loss of earnings resulting from the injury when the injury was initially sustained; and
- the worker’s weekly earnings at the time of the worker’s loss of earnings resulting from the recurrence of the injury; and
- any compensation the worker is already receiving with respect to that injury.”
- the amount that is the greater of:
- The annual review date on claims made under legislation in effect prior to January 1, 1980 is always the anniversary of the date of injury. The annual review date on claims made under the Act is always the anniversary of the date of the original commencement of loss.
- The applicable CPI percentage increase is as of November 30 in the year immediately preceding the annual review date.
- Eligibility for a CPI percentage increase is not dependent on compensation being paid continuously with no interruptions throughout the 12 month period leading up to the first annual review date or subsequent review dates.
- Suspension does not disqualify CPI adjustments if the annual review date occurs during the period of suspension. No compensation is paid during suspension, but the adjustment in compensation triggered by the annual CPI percentage increase is applied when compensation payments are recommenced.
- Where an injured worker returns to full employment and thereafter is eligible for benefit reinstatement, compensation will be payable in accordance with Section 72 of the Act. Compensation payable to the worker will be the greater of the worker’s:
- Weekly earnings as of the date of injury (injury prior to January 1, 1980) adjusted for annual CPI percentage increases; or
- Weekly earnings as of the date of the original commencement of loss (injury on or after January 1, 1980) adjusted for annual CPI percentage increases; or
- Subject to POL 18/2017, Wage Base – Recurrence, the average weekly earnings at the time of the most recent recurrence of the injury.
- When workers have not been in receipt of a recurrent wage base for a full year prior to the annual review date, the CPI adjustment will be prorated. The proration will be based on the number of months between the date of recurrence and the annual review date. The number of months will be based on a full month calculation (not reduced to days within a month). The count begins with the month in which the recurrence takes place, whether it is the first day or any other day of that month, and excludes the month of the annual review date.
- Adjustments to compensation benefits and other allowances that are based on the CPI increase can be implemented on the written instruction of the Chief Executive Officer.
- Compensation adjusted for annual CPI percentage increases is not to exceed the maximum wage rate at the time of calculation (POL 09/2019, Maximum Wage Rates). Apart from increases called for by POL 09/2019, the maximum wage base is not subject to indexing. The original wage base, adjusted to date, is to be compared with current maximums at the time of each review.
(1) January 1, 2014. References updated in accordance with The Workers’ Compensation Act, 2013.
(2) POL 37/2010, Consumer Price Index (CPI) – Annual Indexing (effective January 1, 2011 to December 31, 2013).
(3) POL 20/96, Repeal of Policies – Statutory Increases (effective January 1, 1997 to December 31, 2013).
(4) POL 40/95, Automatic Escalation of Minimum Average Weekly Earnings (effective December 4, 1995 to December 31, 1996).
(5) POL 41/95, Automatic Escalation of Minimum Compensation Payable (effective December 4, 1995 to December 31, 1996).
(6) POL 45/95, Annual Increase of Compensation (effective December 14, 1995 to December 31, 1996).
(7) Board Order 30/81, Annual Review of Compensation Being Paid for Loss of Earning Capacity (effective August 19, 1981 to December 31, 2010).