Document name
Pension Commutation (The Workers’ Compensation Act, 1974)
Document number
POL 13/2016

Effective date: August 1, 2016

Application: All requests for pension commutations under the Old Act.

Policy subject: Annuities and pensions

Purpose:

To establish guidelines for commuting pensions payable under The Workers’ Compensation Act, 1974.

DEFINITION

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Commutation means a lump sum payment that is made, either at the time when the permanent disability pension was first established or at a later date, in exchange for whole or part of the worker’s permanent disability pension.

BACKGROUND

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Section 76(1) of The Workers’ Compensation Act, 2013 (the “Act”) authorizes the WCB to commute permanent disability pensions in accordance with Section 82 of The Workers’ Compensation Act, 1974.

POLICY

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  1. Workers receiving periodic permanent disability pensions payable under The Workers’ Compensation Act, 1974 may request to have their benefits commuted to a lump sum (i.e., exchanged for a commutation).
  2. The WCB will consider each pension commutation request on its own merits, while taking into account the following guiding principles:
    1. Commutation is in the worker’s or dependants’ best interest.
    2. Commutation is needed.
    3. The worker has explored other sources of financial aid and counselling.
    4. The pension accounts for less than 50 per cent of the worker’s total income.
  3. The WCB will not commute a worker’s pension in the following situations:
    1. The worker is currently in receipt of, or likely to receive, earnings loss benefits.
    2. The pension accounts for 50 per cent or more of the worker’s total income.
    3. The dependent spouse is receiving the worker’s pension.

Policy references

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Section heading

Act Sec #

Section detail

76(1); The Workers’ Compensation Act, 1974 82

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Supersedes

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POL 11/2010 Pension Commutation (The Workers’ Compensation Act, 1974)

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Complements

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