Advances and lump sum commutation requests

If the request is for a lump sum commutation for a worker, review the claim to determine if the worker previously declined an offer for a lump sum commutation and, if so, whether their PPD or ELP has increased since the offer was made. If they declined a previous offer for a lump sum commutation and:

• There has been no increase to their PPD or ELP since the offer was made, the lump sum commutation can be approved. Go to step 4.
• There has been an increase to their PPD or ELP since the offer was made, continue with this step.

Consider:

• If they are not receiving an ELP or a PPD, the worker is not eligible for a lump sum commutation. Go to step 4. If the worker is in receipt of a PPD, consider their total PCI rating on the current claim only and do not consider their cumulative PCI based on all their claims.
• If the worker is in receipt of an ELP, determine if any further periodic reviews are required. Generally periodic reviews are required until the worker reaches their normal retirement age and the ELP retirement adjustment has been applied.  If periodic reviews are still required, the worker is not eligible for a lump sum commutation. Go to step 4.
• If the worker is in receipt of an ELP, consider whether their annual ELP amount is 10% or less than their annual net earnings at the time of their accident (calculated in accordance with the WCA and the WC Regulation). 

Based on those factors, consider whether policy allows for a lump sum commutation when:

• The worker is in receipt of a PPD and PCI is 25% or less, or the worker is in receipt of an ELP and the annual amount of the ELP is 10% or less than their net annual earnings and no periodic reviews are required. If so, go to step 4.
• The worker is in receipt of a PPD and PCI is more than 25%, or the worker is in receipt of an ELP and the annual amount of the ELP is more than 10% of their net annual earnings and no periodic reviews are required, consider whether the medical evidence supports that the worker's injury has stabilized and will not likely deteriorate.  If the worker’s injury has not stabilized or is likely to deteriorate, they are not eligible for a lump sum commutation. Go to step 4.

If the worker does not qualify for the commutation, an advance of their future ELP or PPD with interest applied could be considered.

Lump sum commutation requests

Discuss the conditions that need to be met for approval of the lump sum commutation and outline any information you require:

• For workers, explain that you must determine if they are in good health. Ask them to have their physician complete and return a health assessment form.
• Ask if they have verifiable, independent and stable sources of income other than the ELP or PPD.
  • If they confirm they have verifiable, independent and stable sources of income, explain they will need to provide evidence of this income (e.g., paystub, tax return, letter from the source of the income, etc.).
  • If they confirm they do not have verifiable, independent and stable sources of income, explain they will need to obtain independent financial advice to confirm that the commutation will not adversely affect their long-term financial position. Explain the person providing the advice must be a Chartered Accountant (CA), Certified Management Accountant (CMA), Certified General Accountant (CGA), Chartered Financial Analyst (CFA), or lawyer. WCB will reimburse up to $400 for the independent financial advice.

If the request is from a worker who is in receipt of an ELP and the payment screen displays an estimate of the lump sum commutation amount, provide that information to the worker. Explain this is only an estimate and ask if they require an accurate calculation of the lump sum commutation prior to making a decision on whether to proceed with the request. 

If the decision maker needs assistance in obtaining the estimate of the lump sum commutation while they are in receipt of a PPD, the payment unit can provide assistance. 

Contact the worker again once the estimate is provided and confirm if they want to proceed with the request.

Once the completed information (health assessment form, confirmation of verifiable, independent and stable source of income and/or independent financial advice) is received, go to the next step.

Advances with interest

Call the worker to discuss their request. Confirm the amount they are requesting and explain that compound interestCompound interest is calculated monthly by multiplying the outstanding principal amount by a monthly interest rate. is charged on advances over $500.00, except when the advance is equal to or less than one month of benefits.

Note: The interest rate is determined by WCB’s Finance Department on a yearly basis.  

Obtain the following information: 

• Reason for the advance with interest
• Their monthly income and expense details to confirm the worker is not dependent on the monthly benefit for the necessities of life. Explain that you need them to complete the WLS/ELP Lump Sum/Commutation form to verify their average monthly income and expenses. This form should be completed based on household income and expenses (not just their income and expenses). This form may also be completed over the phone.
• Whether they have another source of income other than the monthly wage loss supplement or PPD.
• Whether they qualify for a loan from a financial institution
• The method of recovery for the advance with interest.

Send the appropriate letter describing any additional information required if it is not available during the call.

Review all of the information received and determine if the worker meets the conditions for a lump sum commutation or advance with interest,

Lump Sum Commutation 

Review the completed forms and any other information submitted (e.g., health assessment form, confirmation of verifiable, independent and stable source of income and/or independent financial advice) and determine if the worker meets all the conditions outlined in Policy 04-04, Part II, Application 8, Question #3 section (a) 

Consider:

• Whether the worker's medical condition is stabilized and not likely to deteriorate. For example, some injuries/surgeries may lead to accelerated degeneration or arthritis so future deterioration may be a probability. If unsure, consider a referral to a medical consultant for an opinion.  
• Whether aside from the compensable injury, the medical information supports the worker is in good health.
• The worker's work restrictions to confirm their work injury has not resulted in a significant earnings impairment or, if their restrictions have resulted in a significant earnings impairment, consider if they have verifiable, independent and stable sources of income. 

If the worker does not meet the conditions above, determine if they meet all the conditions outlined in below. Consider:

• Whether the worker's medical condition is stabilized and not likely to deteriorate. For example, some injuries/surgeries may lead to accelerated degeneration or arthritis so future deterioration may be a probability. If unsure, consider a referral to a medical consultant for an opinion.  
• Whether aside from the compensable injury, the medical information supports the worker is in good health.
• The worker’s PCI rating and work restrictions, and whether these restrict or are likely to restrict their ability to manage their affairs.
• Whether the worker has provided independent financial advice that the commutation will not adversely affect their long-term financial position.

If the conditions are met, submit a recommendation to approve the request for a lump sum commutation to the supervisor for review. The supervisor will forward the request to the next approval level, if required.  

If the conditions are not met, go to the next step to communicate the decision.

If additional investigation/information is required (i.e., medical opinion or medical examination/assessment), call the worker to discuss what additional information is required. Arrange referrals as appropriate. Repeat this step once the additional information is received.

Note: Review the Alerts to confirm if there is an active Diversion on the claim. Diversions are a court order directing WCB to garnish/deduct money that is owing to a third party. This can impact the worker’s ability to sustain the repayment.

Advances with interest

Consider the reason for the advance with interest and determine if the worker meets all of the following conditions:

• They do not qualify for alternative options such as other WCB benefits (for example, a lump sum commutation or vocational services) or a loan from a financial institution,
• They are not dependent on the monthly benefit for the necessities of life, and
• In your opinion, allowing an advance is in their interest or is a pressing need.

If the conditions are met, request calculation of the advance including interest from the Payment Unit. Once the calculations are completed, request approval from the supervisor if required. The supervisor will forward to the next approval level, if required. 

If the conditions are not met, go to the next step to make and communicate the decision.

Review the recommendation from the supervisor/manager/director to approve or not approve the lump sum commutation or advance with interest. Action any recommendations, as appropriate.

Call the worker to discuss the decision and follow up by sending the appropriate letter. Clearly express the rationale used to reach the decision during the conversation as well as within the letter.

If the request for a lump sum commutation or advance with interest is not approved, discuss the rationale for not approving the request including any conditions that were not met. For lump sum commutation requests, explain that if their circumstances change, another request can be submitted for reconsideration.

If the request for a lump sum commutation is approved, advise them they will receive a letter with an estimated amount for the lump sum commutation that they will need to sign and return before the lump sum commutation will be issued. Ensure they understand that the final amount of the payment may differ from the estimated amount provided in Step 2. Should they ask an estimated amount, obtain it from the Payment Unit. To note: the amount of the commutation does change each month so an exact amount cannot be given. Reach out to them with the calculation once it's ready. If they opt for the lump sum commutation after confirming the final amount, send the relevant letter. 

If the request for an advance with interest is approved, discuss the terms of the advance including any interest charges that will apply. Negotiate the repayment plan (e.g., deductions from their monthly benefits) for the advance and when the amount will be repaid.  

For workers, explain that payment of their lump sum commutation does not impact their eligibilityRefer to Policy 04-04, Part II, Application 8 - Lump Sum Commutations, question 7. to other benefits and services required for their compensable injury (e.g., medical treatment, and prescriptions, when appropriate). 

A partial lump sum is uncommon and should only be requested on a rare basis. When a partial lump sum is approved, the worker dependent spouse, dependent adult interdependent partner or dependent child remains eligible for the remaining ELP or PPD. 

Send the appropriate letter to communicate the decision. Monitor for the receipt of the signed letter for lump sum commutation requests before proceeding to the next step.

Lump sum commutation

Once the worker's signed letter of agreement for the lump sum commutation is received, send a referral to the Payment Unit to request the lump sum commutation for the PPD or ELP.

Send the appropriate letter confirming the decision. 

Advance with interest

Send a referral to the Payment Unit outlining the details of the advance the amount to be issued and the monthly repayment schedule.

After the payment is issued, the payment unit will delete the advance payment and set up the recovery plan. Once the advance has been paid in full, the payment unit will send a letter to that payee confirming the advance has been paid in full.

If the worker requests a letter to confirm the balance owing, send a request to the Payment Unit to send a letter.