Under section 26 of the Statutory Accident Benefits Schedule under Ontario’s Insurance Act, insurers may be required to pay a death benefit of $10,000 to each dependant of an insured individual who dies as a result of an automobile accident. To qualify for this payout, the person claiming the benefit must be “principally dependent for financial support or care on the individual [who dies as a result of the accident] or the individual’s spouse.” 

There are two key approaches to determining whether someone is principally dependent for financial support for the purposes of identifying eligibility for benefits under the Statutory Accident Benefits Schedule: 

• The first is the “50% +1” approach, where the court turns to a mathematical analysis of whether the deceased provided for more than 50% of the financial needs of the dependant in question at the time of the accident. If the answer is yes, then that person is considered principally dependent and entitled to compensation.  

• The other approach, known as the “big picture” approach, is much more holistic, and recognizes other factors may render a person principally dependent. The leading case on this approach, Miller v. Safeco Insurance, highlights four key factors to consider: 1) “the amount and duration of the financial or other dependency,” 2) “the financial or other needs of the claimant,” 3) “the ability of the claimant to be self-supporting, and 4) “the general standard of living within the family unit.” It is important to note that these four factors are not necessarily exclusive. See Allstate Insurance co. of Canada v. Intact Insurance Co.  

This leads to the question of which method of determining eligibility of dependants to benefits under the Statutory Accident Benefits Schedule is typically applied by Ontario courts. Two recent cases provide guidance on the issue. In Economical Insurance Group v. Desjardins Insurance, the Court held that the big picture approach, or the Miller approach, is appropriate only where there is “insufficient evidence to apply a 50% + 1 analysis” or where it is “too arbitrary and nuanced a cut-off when viewed in the overall circumstances.” The Court acknowledged that, although the mathematical approach is seldom conclusive, a person is not principally dependent if most of their needs can be met from their own resources. 

In April, the Court in Jeffrey v. Aviva, used the framework set forth in Economical Insurance when evaluating whether a 63-year-old woman was principally dependent on her spouse. Prior to the accident, both the applicant and the deceased were retired for three years. As of the last tax year, the husband earned $68,995.72 and she earned $46,130.56. Together, the couple’s expenses for the same year were $40,484.36. Following her husband’s death, the applicant hired a handyman and housecleaning services because her husband had assumed responsibility for most of the cooking and chores around the home. The applicant argued, amongst other things, that the Court should use a big picture approach to assess her status as a dependant. The Court acknowledged that “after 44 years of marriage, there are aspects of a relationship and dependency that are not captured by mathematical formulas and baseline measures and that only the applicant may appreciate.” Nonetheless, the Court held that a mathematical approach was appropriate, as there was sufficient evidence to apply a 50%+1 analysis and it was not too arbitrary and nuanced a cut-off when viewed in the overall circumstances. Therefore, the applicant was not considered to be principally dependent on her late husband. 

While the issue of financial dependency under the Insurance Act and/or the Statutory Accident Benefits Schedule differs from considerations of whether an individual qualifies as a dependant under Part V of the Succession Law Reform Act, possible eligibility for benefits should be considered in our estate matters where the deceased died as a result of a motor vehicle accident.  

Thank you for reading, 

Suzana Popovic-Montag and Connor Dayton