How Long-Term Benefit Payments are Calculated
Permanent Impairment Benefit (PIB) calculation
When a medical examination determines that your injury has resulted in a permanent impact, you may be entitled to receive a Permanent Impairment Benefit (PIB). The amount of this benefit is determined by something called a Permanent Impairment percentage (PI%). Your PI% is determined by a medical examiner and by using a standardized rating system.
This benefit is paid as a lump sum or monthly payment which you may be eligible to receive for the rest of your life.
WCB uses your PI% to calculate your benefits using this formula:
PIB = (PI% × 30%) × (85% × net average weekly earnings)
PI = permanent impairment rating (%) from a physician’s assessment
30% = set factor in the formula
85% = wage-loss replacement rate
Net average weekly earnings = your weekly income after standard deductions (not your full gross salary)
Example of PIB calculation
This is how PIB is calculated based on a $50,000 annual salary:
- Convert to weekly gross pay: $50,000 ÷ 52 weeks = $961.54 per week (gross)
- Estimate net weekly earnings (after deductions): Net is about $750/week
- Apply 85% wage replacement: 85% × $750 = $637.50
- Apply impairment rating: assume doctor sets a 10% permanent impairment (PI)
Using the PIB formula: PIB = (10% × 30%) × $637.50 = 0.03 × $637.50 = $19.13 per week
PIB benefits are paid monthly, so multiply the weekly payment by 4.333 (52 weeks ÷ 12 months):
Monthly PIB benefit = $19.13 × 4.333 = $82.89
PIB payment types
A Permanent Impairment Benefit (PIB) can be paid either as monthly payments or as a one-time lump sum. How it’s paid depends on several factors, including your impairment rating (PI%), whether you also receive an EERB, and the circumstances of your claim.
If your PI% is under 30%:
- If you also receive an EERB, your PIB is generally paid monthly, on the same schedule as your EERB.
- If you do not receive an EERB, your PIB is paid as a lump sum.
If your PI% is 30% or higher:
- PIB is paid monthly—usually paid on the 1st Wednesday of each month. Signing up for direct deposit is the fastest way to get your payments.
- If you do not also receive an EERB, you may apply to have your PIB paid as a lump sum instead of monthly payments. This is called a commutation.
If you’re unsure which payment type applies to your situation, contact your case manager for clarification.
How lump-sum PIBs work
A lump-sum PIB is a one-time payment that replaces the monthly PIB you would have received over time.
A lump-sum PIB is not your monthly amount multiplied by the number of years you might receive it. It’s the present value—the today value—of those future monthly payments, calculated using standard actuarial methods.
Why it’s less than “monthly × years”
When turning future payments into one amount today (a commutation), the amount is adjusted for how money works over time:
- A dollar today can grow. Money you have now can earn interest or be invested. A dollar you get later can’t grow because you don’t yet have it.
- Prices rise over time. Inflation reduces buying power, so a dollar received in the future is worth a bit less in today’s terms.
Because of this, future payments are discounted to today’s dollars. The calculation also builds in: your age when the benefit was awarded, expected cost-of-living increases to PIB (indexing), expected interest rates, and life-expectancy assumptions (based on 1983 Group Annuity Mortality Table).
These inputs produce a commutation factor—an actuarial “exchange rate” that tells us how much $1 of monthly PIB is worth today if paid at once. Your lump sum is your monthly PIB × that factor.
Quick illustration
- $1,000/month for 12 months totals $12,000. Present value today ≈ $11,500
- $1,000/month for 20 years totals $240,000. Present value today ≈ $140,000
Examples are for illustration only. Your amount depends on the assumptions in effect when your lump sum is calculated.
Extended Earnings-Replacement Benefit (EERB) calculation
The EERB is a long-term income loss benefit paid when a worker cannot return to their pre-injury earnings because of a permanent workplace injury (physical or psychological). The EERB ensures you still have an income, even if you can’t go back to your old job or earn the same income again.
EERB = 85% × (Pre-injury net earnings – Post-injury net earnings)
Pre-injury net earnings = your average weekly net income before your injury (after tax, CPP, EI, etc.).
Post-injury net earnings = what you can earn now, after your injury, in suitable work (if any). If you cannot work at all, post-injury earnings are $0.
WCB pays 85% of the difference.
Example of EERB calculation
Worker earning $800/week before injury, now earns $300/week after injury:
- Pre-injury = $800/week
- Post-injury = $300/week
- Difference = $500
- 85% × $500 = $425 per week (this payment is ongoing, and is subject to review, as long as reduced earnings continue)
How PIB and EERB work together
You may receive both benefits at the same time if your injury is permanent and it reduces your ability to work.
Together, the PIB recognizes the lasting impact of the injury, while the EERB helps replace lost wages.
Example of PIB and EERB calculation
Worker’s weekly earnings (after deductions): $800 | Permanent impairment rating (PI): 20% | Current earning ability after injury: $300 net per week
PIB: PIB = (20% × 30%) × (85% × $800) = 6% × $680 = $40.80 per week (paid for life)
EERB: 85% × ($800 – $300) = $425 per week (ongoing)
Total weekly support: $40.80 + $425 = $465.80
Total monthly support: $465.80 x 4.333 = $2018.32
Canada Pension Plan Disability Benefits
You may also be eligible for Canada Pension Plan Disability Benefits (CPPDB) on top of your PIB. Getting CPPDB will not affect what you receive through a PIB. PIB is a recognition of the permanent impact of an injury (physical or psychological), not earnings replacement. Please be aware that accepting the federal disability benefit will affect the amount you receive on EERB.
How CPP-D affects EERB
If you start receiving CPP-D, your EERB is reduced by 50% of the amount you receive from the federal benefit. This is because EERB is designed to replace lost income up to a maximum (85% of net pre-injury earnings). If CPP-D is paying part of that lost income, WCB makes up the difference—not the full amount.
Example:
- Monthly EERB without CPP-D = $2,000
- Monthly CPP-D = $1,000
- Minus 50% of CPP-D = $500
- New WCB EERB = $2,000 – $500 = $1,500
- Total monthly income (CPP-D + EERB) = $2,500
As you can see in this example, the person will have more income after they apply for CPP-D, even though their WCB EERB was reduced by $500.00
Visit Canada Pension Plan for more information.
IMPORTANT: It is extremely important to notify your case worker if you become eligible to receive CPP-D. Your EERB benefit will be adjusted as a result. If you receive both CPP-D and EERB, and WCB does not know about your CPP-D, this can cause an overpayment, which you may need to pay back to WCB.
Stay in touch
You might have more questions about long-term benefits, so please contact us for further answers. If you have an assigned case worker, please contact them directly. They are here to support your recovery and are committed to providing quality service in a timely manner.
Log in to WCB Online to quickly and easily access claim info, submit forms, and communicate securely with us.
Call us: We are also available at 1-800-870-3331.
Appealing a Benefit Decision
You have the right to appeal decisions made about your benefits. Such as:
- The PI% used to determine your PIB benefits
- Income calculations used to determine your EERB benefits
- If you are able to have your monthly PIB benefits commuted for a single lump sum payment
Learn more information on how to appeal a claim decision.