International Law

Income Replacement Benefits Subject to Garnishment

Mr. Justice John Cavarzan has held, in Lease Truck Inc. v. Serbinek, that a creditor of an insured is entitled to garnishment of income replacement benefits. Once it receives notice of the garnishment, the insurer paying the accident benefits is obliged to pay 20% of the IRB to the creditor. (Justice Cavarzan ruled that 80 percent of the benefit is exempt from seizure by virtue of section 7(2) of the Wages Act.)

Counsel for the insured had relied on s. 65(1) of the Statutory Accident Benefits Schedule - Accident on or after November 1, 1996, which prohibits the “assignment of a benefit”. However, Justice Cavarzan held that a seizure or attachment was not within the s. 65 reference to “assignment”.

Full post as published by Cavanagh Williams on November 26, 2008 (boomark / email).