The Appeal CommissionThe Workers Compensation Act of Manitoba

Preamble

The worker appealed two decisions made by Review Office of the Workers Compensation Board ("WCB") related to her claim for a back injury that occurred on June 25, 2007. A hearing was held on June 11, 2012 to consider the matter.

Issue

Whether or not the worker is entitled to further benefits; and

Whether or not the worker's average earnings should be $365.71 weekly.

Decision

That the worker is not entitled to further benefits; and

That the worker's average earnings should be $365.71 weekly.

Decision: Unanimous

Background

The worker filed a claim with the WCB for a work-related accident that occurred on June 25, 2007. The worker described the accident as follows:

…I was holding onto the hand rail with my right hand and had the baby in my left arm. My left foot slipped down 2 steps and hit the landing. I caught my right arm on the railing and pulled up stopping my body. When I did this, my right foot kept going down the stairs and the rest of my body went backwards and to the right side. I didn't drop the baby, but I jarred the entire right side of my body. I felt immediate pain in my left leg and lower back…It felt strained, like muscles were being pulled. The next morning the pain progressed. The pain was mostly muscular. I wasn't able to straighten my left leg completely. I couldn't lift my right arm above my head. My lower back, right side of my back and the base of my neck were all extremely stiff.

A doctor's first report showed that the worker attended for an examination on June 28, 2007. The worker complained of right shoulder pain and tenderness in her left neck, shoulder muscles and low back. The claim for compensation was accepted based on the diagnosis of a back strain and benefits were paid to the worker.

On October 11, 2007, the worker was diagnosed with bilateral SI joint sprain, right piriformis spasm and "right trapezius" by her treating physiotherapist.

On October 25, 2007, the WCB determined that the worker's average earnings were $463.74 per week effective June 28, 2007 based on her 2005 income tax return.

On January 21, 2008, the worker advised the WCB that she continued to have a low back ache but that the pain in her right hip had gone away. She felt that she had reached a plateau with physiotherapy as her condition was not improving any further. She said that she could lift 75 pound weights.

On April 9, 2008, the worker was seen by a WCB physiotherapy consultant for a medical assessment. It was concluded that the worker's right shoulder and left knee injuries had resolved and that she presented with non-specific mechanical back pain. Further chiropractic treatments were recommended to improve the worker's spinal mobility and for her to undergo a four week reconditioning program. It was considered that the worker would be fit to resume her full-time employment at the completion of the reconditioning program.

By letter dated May 14, 2008, the worker was advised of the WCB's decision that she would be considered fit to resume her pre-accident duties upon completion of the four week reconditioning program and that wage loss benefits would be paid to May 30, 2008 inclusive and final.

On April 17, 2008, the worker was seen by a chiropractor and was diagnosed with mechanical lumbar dysfunction. In a follow up report dated July 22, 2008, the chiropractor noted that the worker presented with neck pain on May 12, 2008. He noted that the last chiropractic treatment was on May 30, 2008 and that no further treatments were scheduled.

On May 26, 2008, the attending physician reported that the worker had slight spasm of the right lumbar muscles and that she can nearly reach her toes with momentary pain on the way down but was mostly pain free.

A reconditioning discharge report dated June 6, 2008 indicated that the worker demonstrated significant improvements in her strength, particularly with squatting and leg movements. The worker could lift 50 pounds from floor to waist level. The worker, however, continued to report tightness and soreness primarily to the right lower quadrant of her low back.

On June 13, 2008, the physiotherapist from the reconditioning program advised the WCB that the worker was at maximum medical improvement and that she should be able to do her job duties as a child care worker. He said the worker should continue with her home exercises for trunk stabilization.

On June 16, 2008, the worker advised the WCB that she could lift weight but when holding the weight she feels a compression/pinch feeling in her low back. She was still not reconditioned to hold weight for any length of time. She still had spasm on the right side of her back.

On June 20, 2008, the worker was advised that the WCB was authorizing five ART (active release treatment) sessions to help with muscle soreness but it was not reinstating her wage loss benefits. It was the WCB's opinion that based on the final report from the reconditioning program, the worker was fit to resume her pre-accident job duties. It was felt that the ART sessions and the home exercise program would allow the worker to maintain her current level of activity and her condition would continue to improve.

On June 23, 2008, the treating physician asked the WCB to extend physiotherapy benefits to the worker. He noted that the worker still had spasm in the right lumbar muscles, full flexion, and excellent range of motion. The worker was 90% recovered.

On July 16, 2008, the treating physician reported that the worker felt worse since stopping physiotherapy treatments. Examination showed spasm in the right lumbar muscles, tenderness in the SI joints right more than left, decreased range of motion in the neck and only able to reach knees on forward flexion. It was felt that the worker was not capable of returning to work.

On September 8, 2008, an advocate acting on the worker's behalf, asked the WCB to reinstate the worker's benefits based on the attending physician's opinion that the worker was unable to return to work. The worker believed that her recovery had been hindered by the lack of ongoing medical treatment and high level of stress and anxiety due to the arbitrary unsupported denial of benefits.

By letter dated September 24, 2008, the WCB advised the worker that after reviewing medical information on file, there was no new information that would warrant a change to the decisions made on May 14, 2008 and June 20, 2008 that she was capable of working her pre-accident duties as of June 1, 2008.

On October 20, 2008, the chiropractor who was providing the worker with ART diagnosed the worker with myofascitis in the quadratus lumborum, psoas erectors and sacral ligament.

On November 12, 2008, the worker advised the WCB that she attended a hospital facility on October 28, 2008 as it felt like she broke a rib or tore connective tissue in her back muscles from the ART treatment. She was advised to wait for the inflammation to settle down before going for any further ART treatment.

On November 17, 2008, the worker's advocate wrote the WCB to advise that the worker was injured on October 27, 2008 due to an ART treatment that was prescribed by the WCB and asked that the injury should be adjudicated. On November 20, 2008, the worker's advocate clarified that the worker coughed on the table while receiving ART treatment and that this was what triggered the back pain and necessitated the trip to the hospital facility.

In correspondence dated November 27, 2008, the advocate provided further details related to the ART treatment. She stated: "The worker was very sore after the first treatment, the worker was in tears during the second treatment and was injured during the third treatment. The worker felt extreme pain in her lower back and ribs after receiving the last treatment and then she coughed and felt immediate pain in her ribs, knee and back to the degree that she doubled over and could not stand up. The worker was unable to sleep that evening. The next morning the worker was taken to her doctor and then to [Hospital Emergency]."

On December 2, 2008, the WCB spoke with the chiropractor who performed the ART. The chiropractor reported that after the third treatment session, the worker called to say she had an accident, some unrelated matter, and he was not sure what the reason was but she said that she could not come in. There were no reports of pain mentioned by the worker but it was very common for patients to be in a fair degree of pain the first couple days after treatment. He noted that the worker had various areas of myofascial pain that had not cleared up.

A WCB medical advisor reviewed the file on December 16, 2008 and the following opinion was formed:

• the diagnosis related to the June 25, 2007 injury was a low back strain. The reports related to the reconditioning program and the attending physician in June 2008 all suggest that the worker had recovered from her workplace injury.
• the evidence on file since then relate to an injury occurring on or about October 27, 2008 that was likely not related to the June 25, 2007 workplace accident.
• the hospital report indicated an anterior right rib/chest wall injury and does not indicate an injury to the low back region. There were also reports of further low back pain but a diagnosis was not offered.
• as the ER findings did not relate to the low back region, a relationship with the June 25, 2007 workplace accident was not supported.
• the recent reports related to the low back do not establish a plausible explanation that would establish a relationship with the June 25, 2007 workplace accident and the current symptoms.
• the worker was capable of performing her job duties as a home day care worker in relation to the June 25, 2007 workplace injury to the low back.

By letter dated December 17, 2008, the worker was advised that in the WCB's opinion, she had recovered from the low back strain related to the June 25, 2007 injury and no change would be made to the decision of May 30, 2008. The WCB also stated that it was unable to find that the ART treatment caused the worker's back symptoms or for her to cough.

On July 14, 2009 the worker asked Review Office to reconsider the decision made on May 30, 2008 as she was still symptomatic since her accident of June 25, 2007.

On August 7, 2009, the worker asked the WCB to recalculate her wage loss benefits for the period June 28, 2007 to May 30, 2008. The worker indicated that her wage loss benefits were assessed based on her net business income for 2005 rather than her gross profit.

The worker provided the WCB with a CT scan report of her lumbar spine dated October 15, 2008. The results were read as follows: "Bulging of the disc at L4-5 is noted which may indicate very slight disc herniation. There is also central disc herniation at L5-S1. There is a slight increased sclerotic density involving the left SI joint, particularly the iliac portion. This may be an indication of osteitis condensans illi."

On September 24, 2009, Review Office determined that the worker was not entitled to further benefits. Review Office referred to medical information on file to support its position that the worker had recovered from the effects of her June 2007 accident by May 31, 2008 at least to the point where she no longer had a loss of earning capacity as defined by subsection 40(1) of the Act. Review Office also determined that the worker's ART treatment did not result in a compensable injury as contemplated by WCB Policy 44.10.80.40, Further Injuries Subsequent to a Compensable Injury and that no entitlement flowed from the treatment.

By letter dated December 17, 2009, the WCB advised the worker that she was overpaid benefits in the amount of $1,652.61. "This overpayment on your claim occurred because on August 7, 2009, you requested recalculation on your wage loss benefits. As such, it was noted that we did a review of your earnings for 2005 & 2007 which did not reflect an entire year. Therefore to have a true reflection of your earnings we recalculated the average earnings based on 2006 income tax information." Based on WCB policy 35.40.50, Overpayment of Benefits, the worker was advised that the full amount of the overpayment would be written off and she would not be responsible for repaying the WCB.

A CT of the lumbar spine dated November 9, 2011 read as follows: "No significant interval change from 10/15/2008. Some degenerative disc changes at L4-5 and L5-S1 are noted but appear stable. The small central disc protrusion at L5-S1 approaches the S1 nerve roots bilaterally on the current and previous study without definitive nerve root compression."

The worker's claim was again considered by Review Office on February 2, 2012 based on new medical information submitted by the worker. The worker also argued that her average earnings had been incorrectly calculated and that they should be based on $30,000.00 annual personal coverage she purchased from the WCB.

On February 2, 2012, Review Office determined that the worker's average earnings should be $365.71 weekly. Review Office stated that the worker's average earnings were correctly based on her 2006 income tax return and by WCB policy it cannot be based on the coverage she purchased. Review Office noted that the worker had $26,862.63 in gross business income and her net business income was $8,192.34. When the allowed add backs are included, her pre- accident earnings were $19,016.81, or $365.71 weekly. As this amount was less than the $30,000 coverage she had purchased, her average earnings were set at that amount.

Review Office also determined that the worker was not entitled to further benefits. Review Office indicated that it placed no weight on the results of the November 9, 2011 CT scan as it was unchanged from the October 2008 scan. It noted that the 2008 CT scan found a possible disc herniation at L4-5 and a central disc herniation at L5-S1. It considered this was an incidental finding of no particular clinical importance, as the worker never had any symptoms consistent with a disc injury. Review Office concluded that the additional information did not provide any basis for changing its decision of September 2009. In April 2012, the worker appealed Review Office's decisions to the Appeal Commission and a hearing was held on June 11, 2012.

Prior to rendering a decision on the issues under appeal, the appeal panel requested additional medical information from the worker's treating practitioners. The reports were later received and were provided to the worker for comment. On September 6, 2012, the panel met further to discuss the case and rendered its final decision.

Reasons

Applicable Legislation

The Appeal Commission and its panels are bound by The Workers Compensation Act (the “Act”), regulations and policies of the Board of Directors.

The worker is appealing the WCB decision that she is not entitled to further benefits resulting from her claim. Under subsection 4(1) of the Act, where a worker suffers personal injury by accident arising out of and in the course of employment, compensation shall be paid to the worker by the WCB. Subsection 39(2) of the Act provides that the WCB will pay wage loss benefits until such a time as the worker’s loss of earning capacity resulting from the accident ends. Subsection 27(1) provides that the WCB may provide such medical aid benefits as it considers necessary.

The worker is also appealing the calculation of her average earnings on which her wage loss benefits were based. Subsection 45(1) of the Act provides for the calculation of average earnings which is used in determining wage loss benefit levels. She was a self-employed worker and accordingly her benefits are calculated in accordance with WCB Policies 44.80.10.10.01, Average Earnings and 35.10.120, Optional Coverage.

Worker's Position

The worker attended the hearing with her husband and daughter. The worker explained her reasons for appealing the WCB Review Office decision. She also answered questions from the panel.

Issue 1: Whether the worker is entitled to further benefits.

The worker advised that she was operating a licensed home day-care at the time of the injury. She described her accident and resulting injury to her right shoulder, hip, lower back and left knee. She said that the original diagnosis was a back strain.

The worker described various treatments and tests which were conducted. She feels she sustained a further injury while she was receiving ART from a chiropractor. She noted these treatments were prescribed by a WCB physiotherapy consultant. She said the WCB refused to cover the resulting injury. She attended 3 of 5 ART sessions.

The worker advised that she participated in a work hardening program. She said that participation in the program was improving her strength and endurance because she was doing it every day but "it did not fix the problem, it did not stop the pain, it did not stop the muscle spasms…"

In addition to physiotherapy, ART treatments, and work hardening, the worker advised that she has tried massage therapy, laser therapy and medications but none have fixed or addressed her issue.

The worker said that she did not feel she could return to her daycare job. When asked whether she feels she is capable of doing some other appropriate work she replied "I believe I can. I simply, I am unable to sit for long periods of time. I am also unable to stand for long periods of time."

When asked whether any doctor told her "don't work at all", she responded "no" but they have told her that she is "…very unlikely to ever be able to operate your business". The worker acknowledged that she has not worked or looked for work since the 2007 workplace accident.

Regarding restrictions, she said that she has not been told what her restrictions are. She commented that "I do have restrictions. I can lift fifty pounds from floor to table. I might be able to do it ten times, I might be able to do it in twenty times, tomorrow I might not be able to lift it."

The worker also commented that "I don't have a problem with my strength, I don't even have a problem with my flexibility. Can I move? Yes, I absolutely can. The problem is I'm in pain while I'm moving."

She described her symptoms at the hearing as pain radiating up her right hip, up the right side of her back into her right thigh. She said that most of the pain is on the right side of her back from her belt to shoulder blade. She said the entire section of her back will go into spasm. She said her back has worsened since she completed the work hardening program in 2008. She also said that the pain has affected her sleep.

The worker advised that she has not recovered from the accident. She said that "whatever is physically wrong with me …needs to be diagnosed properly…" She was critical of the WCB's management of her claim.

After the hearing the worker was provided an opportunity to make an additional written submission on medical information that was sought by the panel. The panel considered this submission in its deliberations.

Issue 2: Whether the worker's average earnings should be $365.71.

The worker advised that she has had special coverage with WCB since 2003. She disagrees with the WCB's calculation of her benefits. She said that "I do not believe that they are using the proper accounting procedures in order to realize what my income is."

She said that the WCB accounting states she is earning less than $20,000.00 per year but she has provided tax information to show she earns more.

The worker said that she purchased $30,000.00 of coverage but WCB paid her far less. The worker said the WCB used her net income. She is concerned that WCB failed to add back certain items, such as, hydro and phone expenses.

Analysis

1.Whether or not the worker is entitled to further benefits.

For the worker's appeal of this issue to be successful, the panel must find that the worker's inability to work and need for medical assistance after May 31, 2008 are due to her workplace injury. After considering all the evidence, including the worker's evidence at the hearing, the medical reports on file and medical reports obtained after the hearing, the panel is not able to make this finding. The panel finds that the worker's loss of earning capacity after May 31, 2008 and need for medical assistance, other than that already covered, are not related to her workplace accident.

At the hearing the worker described the pain she suffers from and its impact on her life. In a post-hearing submission, the worker provided a further description of the pain and its impact on her life. She wrote, in part:

"I am in constant pain caused by injuries to the right side of my back, running hip to shoulder blade, my right hip, and my left neck. Daily this pain will range from a moderate stiffness to a #10 on the pain scale. I am not capable of meeting the physical demands of maintaining a business caring for up to 8 children ranging from 12 weeks to 12 years of age. I am unable at times to stand in my kitchen and put a meal together for my family or do the daily cleaning of a family home. I am physically unable to handle many daily chores such as washing dishes, sweeping, vacuuming and washing floors, cleaning bathtubs, making beds, …without suffering from increased pain that will vary based on the activity, amount of time I have, or need to complete the task, how I was feeling at the start of the day and what I did the day before. There is not always a cause and effect. Pain can be brought on or worsen with activity, however, it can also be caused by something as simple as an embrace. I am unable to participate in many of the family and social activities that I enjoyed due to physical limitations/pain and financial hardship. I am unable to drive or ride as a passenger in a vehicle without increased pain in my lower back, hips and legs, as a result I do not drive, I do not travel far and rely on others for transportation when it is required… I suffer from insomnia and generally am unable to maintain sleep for more than 2 hour increments before being awaken (sic) due to pain..."

The panel accepts that the worker has pain, but is not able to relate the above symptoms to her injury. The panel has reviewed all the medical information on the claim file and attaches significant weight to the medical evidence in spring of 2008 when the worker's benefits were terminated. This evidence includes:

• April 9, 2008 WCB physiotherapy consultant report. The physiotherapist noted that the worker presented with nonspecific mechanical back pain and that her treatment had plateaued. He recommended work hardening and further chiropractic treatment and concluded that "the prognosis is for complete recovery with resumption of regular duties on completion of the program." His findings were, for the most, normal, and included:

· some restriction in range of motion and right side flexion

· normal neurological examination

· unremarkable sacroiliac joints

· lower extremity examination: could perform full squat and rise, Trendelenburg test negative, gluteus maximum test in prone Grade 4/5 strength, hip knees and ankles demonstrated full mobility

· stress tests: lumbar traction and compression test normal. Complaints of discomfort with torsion test

· palpation segmental compression of the spinous processes of T12 to L5 unremarkable. No pain complaints, stiffness or reactive spasm.

• May 26, 2008 treating physician progress report which noted that the worker was improving. He also noted the worker "Can nearly touch toes with only momentary pain on the way down. Mostly pain free."

• June 8, 2008 treating physiotherapist report regarding her participation in the work hardening program. He reported that the worker had demonstrated significant improvement in her strength, particularly with squatting and leg movements, that she has been lifting up to medium loads in her exercise program for repetitions, including lifting up to 50 lbs from floor to waist level. He did note that the worker continued to complain of right side lumbar and lumbosacral discomfort.

• June 13, 2008 claim notes which summarizes a conversation with the treating physiotherapist. The case manager notes the physiotherapist did not request extension of the work hardening program and that he considered the worker to be at MMI (maximum medical improvement). He advised that the worker should be able to return to her duties as a child care worker.

• June 23, 2008 treating physician progress report which noted that the worker was "90% recovered." The physician commented that most improvement came with work hardening program and requested that it be extended. He noted full flexion and excellent range of motion, but still some spasm of the right lumbar muscles.

The panel notes that the above findings were largely normal and that the worker's pain complaints at this time were minimal. The panel finds that based upon the above evidence, the worker should have been able to perform her work duties and is not entitled to wage loss benefits after May 31, 2008.

The panel has also reviewed the medical information added to the file subsequent to the WCB termination of benefits on May 31, 2008. In the panel's view, the new information identifies medical issues which are not, on a balance of probabilities, related to the worker's 2007 workplace injury:

• MRI scans were performed in October 2008 and November 2009. These scans indicated that the worker has some degenerative disc changes at L4 and L5-S1 and a slight disc protrusion. The panel is not able to relate these findings to the worker's symptoms. In this regard, the panel relies upon the opinion of the neurosurgeon who examined the worker on June 29, 2011. He found nothing significant in his examination. He reviewed the CT scans and commented "At the lower level, the disc material contacts the right sided S1 root, but I cannot appreciate any significant displacement/distortion. He opined that the "the discomfort she is experiencing is very probably musculoskeletal. I cannot detect any obvious clinical or radiological signs of radiculopathy."

• On September 10, 2008, the worker was examined by a chiropractor who noted in a report dated November 4, 2008 that the worker reported "low back pain, which was described as constant and the pain increases with activity, painful tailbone, loss of sleep, fatigue and tension." The worker also reported "significant headaches." The chiropractor also noted that according to a Low Back Pain and Disability Questionnaire (Revised Oswestry), the patient had a "crippling functional disability of 64%."

• October 20, 2008, first report of chiropractor who was retained to provide ART sessions. Diagnosis indicates myofascitis in quadratus lumborum, psoas erectors and sacral ligament. The worker attended 3 out of 5 ART sessions.

• On December 16, 2008, a WCB medical advisor reviewed the worker's file and concluded that "the worker is capable of performing her duties as a home day care worker in relation to the June 25, 2007 workplace injury to the low back."

• The panel also notes that the worker was referred to a sports medicine physician who examined her on December 19, 2009. He reported minimal positive findings and commented that "Clinically, I could find no sinister cause for her ongoing back pain." He concluded:

"Finally, I noted that she has some set ideas regarding disability associated with her pain. I tried to allay these fears and feel that at present there is no functional limitation that would prevent her from returning to her work environment."

• At the hearing the worker advised that she had recently seen a physician at an occupational health centre. For completeness, the panel obtained a report from the occupational health center physician. We have contrasted the occupational health physician's findings in 2012 to the findings recorded in 2008 by the WCB occupational health physician:

• 2012 there is a positive slump test, in 2008 there was a negative slump test
• 2012 frequent muscle spasm in hip girdle, not recorded in 2008
• 2012 taut bands with associated tenderness in lower and upper lumbar extensors extending into the lower thoracic level of the right back extensors, not recorded in 2008
• 2012 right quadratus lumborum is hypertonic, not recorded in 2008
• 2012 local myofascial tenderness without referral over the SI joint extending into the gluteal muscles, 2008 palpation of sacroiliac joint was unremarkable and mobility testing in weight bearing was unremarkable
• compression tests and challenging the SI joint are negative or equivocal. This is similar to the 2008 test which found compression over the sacrum was unremarkable
• left side flexion is reported as normal in 2012 and 2008
• 2012 over the dorsal spine there is some tenderness at the L3-L4 level, 2008 segmental compression of the spinous processes of T12 to L5 unremarkable, with no pain complaints, stiffness or reactive spasm
• right side flexion reduced to 50% range which is an improvement over 2008 when the range was noted as ¼ range

In a letter dated July 25, 2012 the occupational health clinic physician reported that "By my assessment there is a strong cause and effect relationship, given the lack of symptoms she had pre-dating this injury." The panel notes that this opinion is based upon a temporal relationship only, and does not account for the worker's substantial improvement in 2008 and her changed clinical picture in 2012. The panel finds, on a balance of probabilities, that evidence does not establish a relationship between the 2007 workplace injury and the new or different symptoms and findings in 2012. The panel is unable to relate these changes to the workplace injury.

While the evidence on file suggests the worker's condition worsened after completion of the work hardening program, the evidence does not provide a medical basis for this deterioration. The worker appeared to be well on the road to recovery and was to return to work. While the panel notes that the worker did not return to work, however the overwhelming evidence was that she was fit to return to work in mid 2008.

Regarding the injury that occurred after the third ART session, the worker advised the panel that she was injured while receiving active release treatments from a chiropractor. These treatments were recommended by the WCB physiotherapy consultant. She asked for benefits as a result of the injury.

The panel notes that the alleged injury occurred after the third treatment. File information indicates that the worker attended a hospital emergency ward and was diagnosed with an anterior right rib/chest wall injury. No lower back injury was diagnosed. The panel also notes that coughing after the third treatment precipitated the worker's attendance at the hospital. The panel finds that the evidence does not demonstrate a cause and effect relationship between the workplace injury and the coughing which resulted in a right rib/chest injury. The panel concludes that the ART sessions did not result in a compensable injury as provided under WCB Policy 44.10.80.40 and did not cause an aggravation to the workplace injury. The coughing was an unrelated act and the injury was in the right rib/chest area, not the area of the workplace injury.

The panel finds, on a balance of probabilities, that the worker is not entitled to further benefits.

The worker's appeal on this issue is dismissed.

Issue 2: Whether the worker's average earnings should be $365.71 weekly.

For the worker's appeal to be successful, the panel must find that an error was made in calculating the worker's average earnings. The panel was not able to make this finding. We are satisfied, upon reviewing this matter, that the worker's average earnings were calculated correctly in accordance with the Act and WCB policy.

The WCB has enacted two policies which deal with the calculation of average earnings for self-employed persons who select optional coverage. WCB Policy 35.10.120, Terms and Conditions of Optional Coverage, provides that the amount of coverage purchased by a self-employed person should accurately reflect her earnings. WCB Policy 44.80.10.10.01 Average Earnings, states that it is necessary to determine what part of the gross business income represents business expenses and what part represents personal income.

Under these policies:

1. wage loss benefits are based upon the amount of personal income earned, not the amount of coverage purchased (unless earnings are greater than coverage);and,

2. average earnings are based on personal income not gross business income.

The Average Earnings Policy sets out a formula for calculating income. The formula provides:

[Pre-accident net business income, as verified by Canada Revenue Agency (CRA)]

PLUS

[non-cash expenses such as depreciation, amortization or other special deductions]

PLUS

[Personal expenses that the worker has allocated on financial statements as being due to business, such as expenses claimed for using her home for business]

The WCB elected to use the worker's 2006 income information. This period was selected because the worker did not work a complete year in 2005 or 2007. The panel notes the 2006 income is higher. We consider the use of 2006 income to be reasonable and in accordance with the Average Earnings Policy which provides that:

"To determine a worker's true loss of earnings, the WCB will generally use documentable employment data from any consecutive 12 month period during the one or two years before the compensable accident."

According to the worker's 2006 income tax return, her gross business income in 2006 was $29,472.44. Her net business income was $11,068.18. The WCB added back expenses arising from the business use of her home in the sum of $7,968.43, resulting in net income of $19,016.81. The net amount was divided by 52 weeks which resulted in average earnings of $365.71 weekly.

At the hearing, the worker was concerned that the WCB failed to add back certain items such as hydro and telephone expenses. She was not able to be more specific with her concerns. A review of the files shows that for 2006 the WCB added back into the worker's net income, the following expenses claimed for the business use of her home: heat, electricity, insurance, maintenance, mortgage interest, property tax, water and cable. We find that the appropriate expenses were added back into the worker's income, increasing the amount of her average earnings.

The worker requested that her average earnings be based upon $30,000.00, the amount of coverage that she had purchased. WCB policy provides that benefit payments are based on actual income, not an estimate of income provided for assessment purposes. Given WCB policy, it is not possible for the panel to agree with this request.

The worker noted that her benefit level had varied many times throughout the claim. While the issue before the panel deals with calculations of her average earnings, we note that WCB policy provides for a different calculation for the first 12 weeks of a claim, with an average earnings calculation occurring after that period. We also note that there was a recalculation of the benefit amount due to an error.

The worker also advised at the hearing that she has received refunds from the WCB. The panel notes these refunds are generated when the amount of coverage purchased is greater than the worker's income. Accordingly, she has been refunded for her overpayment of premiums. This has the effect of assessing the worker on her net income rather than total income.

We are satisfied that the worker's average earnings have been properly calculated.

The worker's appeal on this issue is dismissed.

Panel Members

A. Scramstad, Presiding Officer
A. Finkel, Commissioner
C. Anderson, Commissioner

Recording Secretary, B. Kosc

A. Scramstad - Presiding Officer

Signed at Winnipeg this 26th day of September, 2012