Case snapshot
At a glance
- Case
- Can an Insurer Claw Back Accident Benefits Paid in Error in Ontario?
- Court / Tribunal
- ONLAT
- Date
- September 24, 2026
- Area of law
- Motor Vehicle Accident
- Key issue
- Whether an insurer could recover income replacement benefits it continued paying after an injured person returned to modified, part-time work, and whether the repayment notice and quantum requirements under s. 52 of the Statutory Accident Benefits Schedule were met.
- Outcome
- The Licence Appeal Tribunal ordered the injured person to repay $8,837.95 in income replacement benefits paid in error, plus interest under the Schedule.
- Why it matters
- If you receive accident benefits and your circumstances change — such as returning to work — continuing to receive those payments without adjustment can create a repayment obligation even if the insurer made the calculation error.
Legal principle
The rule from this case
Under section 52 of the Statutory Accident Benefits Schedule, an insurer can demand repayment of benefits it paid by mistake, as long as it gives the recipient written notice that identifies the amount owed and does so within 12 months of the payments being made. The insurer does not have to include every calculation in the notice letter itself — it just has to state the amount and the basis for the error clearly enough. In this case, the insurer kept paying full income replacement benefits even after learning the injured person had gone back to work on reduced hours. Because employment income must be deducted when calculating income replacement benefits, the payments made during the return-to-work period were higher than they should have been. The Tribunal found the insurer's notice letter and supporting evidence were sufficient to prove both the error and the exact dollar amount owed.
Important limits
What this does not mean
This decision does not mean an insurer can always recover overpaid benefits. The Tribunal distinguished an earlier case where recovery was denied because the insurer could not prove the specific amount it had overpaid. Here, the insurer succeeded precisely because it provided a detailed, period-by-period breakdown that the Tribunal could independently verify. Without that evidence, the outcome could have been different. The decision also does not suggest that an injured person who returns to work loses all entitlement to income replacement benefits. The calculations in this case show that some benefit was still payable during parts of the return-to-work period — the problem was that the full, unadjusted amount kept flowing. Each situation depends on the individual's earnings, hours, and the specific benefit formula, so the numbers will vary from case to case.
Can an insurer take back accident benefits it already paid?
Yes — under Ontario’s Statutory Accident Benefits Schedule (SABS), an insurer can recover benefits it paid by mistake, provided it follows specific rules about notice and timing. The Licence Appeal Tribunal confirmed this in Security National Insurance Company v. Younge, 2026 CanLII 100086 (ON LAT), https://www.canlii.org/en/on/onlat/doc/2026/2026canlii100086/2026canlii100086.html, ordering an injured person to repay more than $8,800 in income replacement benefits.
For anyone receiving accident benefits in Ontario, this decision is a useful reminder that benefit amounts are not always final, and that changes in your situation — like going back to work — can affect what you are entitled to receive.
What is an income replacement benefit and how is it calculated?
An income replacement benefit (IRB) replaces a portion of the wages you lose because an accident prevents you from working. The amount is not simply a flat payment — it is adjusted based on what you actually earn after the accident. If you return to work, even on reduced or modified duties, your employment income must be factored into the calculation, and the benefit goes down accordingly.
In this case, the injured person went back to work on modified, part-time duties in August 2023. Her legal representative notified the insurer and sent paystubs. Despite receiving that information, the insurer continued paying the full, unadjusted benefit for several more months — which is how the overpayment accumulated.
What does the law say about repaying benefits paid in error?
Section 52 of the SABS sets out a clear framework. A person who receives a benefit paid because of an insurer’s error is required to pay it back. The insurer must give written notice of the amount owed, and it must do so within 12 months of the date the payments were made. Both conditions must be satisfied — notice and timing.
In this case, the insurer sent its repayment notice in May 2024, and all the payments it sought to recover had been made between September 2023 and January 2024 — well within the 12-month window. The Tribunal found the notice was valid.
Does the notice letter have to include every calculation?
No — the notice does not have to contain a full mathematical breakdown, but it does have to clearly state the amount being claimed and identify the nature of the error. The injured person in this case argued the notice letter was deficient because it lacked detailed calculations. The Tribunal disagreed.
The insurer’s letter identified the error (failing to deduct return-to-work income), stated the total amount owed ($8,837.95), and itemized the payments that formed the basis of the claim. The Tribunal found that was enough to satisfy the notice requirement. The detailed period-by-period calculations were provided separately as evidence, and the Tribunal was able to independently verify the math.
Does it matter that the insurer was slow to adjust the claim?
Not under the current law, according to this decision. The injured person argued that the insurer’s own lack of diligence caused the overpayment — after all, the insurer had received paystubs showing the return to work and still kept paying the full amount. The Tribunal acknowledged that faster action by the insurer might have prevented the overpayment entirely.
However, the Tribunal found no legal authority under section 52 that would excuse repayment simply because the insurer was slow to act. The obligation to repay flows from the fact that the benefit was paid in error — not from who caused the delay. This is an area where injured people and their representatives may want to pay close attention.
What was different about the earlier case the injured person relied on?
The injured person cited a 2025 LAT decision where an insurer’s repayment claim was rejected because the insurer could not prove how much had been overpaid. The Tribunal in this case found that situation was different: here, the insurer provided a detailed, period-by-period breakdown that the Tribunal could independently confirm. The lesson is that an insurer’s repayment claim can fail if the evidence is insufficient — but it can succeed when the numbers are clearly documented and verifiable.
This distinction matters for anyone disputing a repayment demand. The strength of the evidence on both sides can be decisive. Our Ontario motor vehicle accident lawyers can help you understand what evidence is relevant to your situation.
Questions and records to discuss with a lawyer
- Did you notify your insurer promptly when your employment situation changed after the accident, and do you have documentation of that notice?
- Have you received a repayment demand from your insurer, and does it clearly identify the alleged error and the amount claimed?
- Were the payments the insurer wants back actually made within the 12 months before the notice was sent?
- Do you have your own pay records, paystubs, or benefit statements that could be used to check the insurer’s calculations?
- Has your insurer provided a period-by-period breakdown of how it arrived at the repayment figure?
If you have questions about a repayment demand or how a return to work affects your accident benefits, the team at UL Lawyers is available to discuss your circumstances at ullaw.ca/connect.
This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.
FAQ
Frequently asked questions
Under the Statutory Accident Benefits Schedule, an insurer must give written notice of a repayment demand within 12 months of the date the payments were made. Payments made more than 12 months before the notice cannot be recovered.
Your income replacement benefit is reduced to account for the employment income you earn after returning to work. If you go back on modified or part-time duties, the benefit is recalculated based on your actual earnings, and the amount you receive should decrease accordingly.
Yes. If you disagree with a repayment demand, you can apply to the Licence Appeal Tribunal to have the dispute resolved. The insurer must prove both that an error occurred and the exact amount overpaid — and the strength of the evidence on each side can affect the outcome.