A recent case the Ontario Superior Court of Justice held that damages or compensation for pain and suffering including interest is considered to be exempt income for the purpose of calculating a person's entitlement to disability benefits.
The case is Mule v. Ontario Disability Support Program 88 O.R. (3d) 326. ODSP initially decided that the part of the settlement representing prejudgement interest did not constitute "damages or compensation for pain and suffering as a result of injury" and therefore it was to be included in applicant's income in their application for disability benefits. The applicant appealed this decision. In making their decision the court looked at the meaning of the word "for".
They stated that the most appropriate meaning to give to the word"for" in this context was "having a reason or cause". The court indicated that the interest was dependent on the entitlement to damages. The interest paid could not exist independently it formed part and parcel of the award for damages or compensation. Therefore, the interest was to be exempted from income.
This case is also relevant in the WSIB context. It applies to those individuals who are receiving ODSP benefits and who receive a non economic loss award together with interest.
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