Public Automobile Insurance Plan

Income Replacement Following a Traffic Accident

The income replacement indemnity paid by the SAAQ compensates for the income lost by a person who can no longer work as a result of a traffic accident.

You have a maximum of 3 years as of the date of the accident, the onset of injury or the death of an accident victim to file a compensation claim with the SAAQ.

What you should know

The income replacement indemnity is an amount paid to a person who can no longer work as a result of a traffic accident.

Amount of the income replacement indemnity

The income replacement indemnity is calculated on the basis of the employment the person held at the time of the accident.

It corresponds to 90% of net annual income, calculated on the basis of a gross annual income of up to $88,000. The maximum amount of the indemnity is indexed every year. 

No income replacement indemnity is paid for the first 7 days that follow the accident. After this period, it is paid every 14 days.

If you are imprisoned because you were convicted of a driving-related Criminal Code offence, the SAAQ may reduce the amount of your income replacement indemnity for the duration of your incarceration.

If you were employed on a part-time or temporary basis

The income replacement indemnity you receive will be re-evaluated if you are still unable to work 6 months after the accident. At that time, it will be calculated on the basis of full-time employment. This employment could be the one you held at the time of the accident or a potential employment, i.e. one that you could have held at the time of the accident. 

If you were unemployed

You may be entitled to an income replacement indemnity during the first 6 months that follow the accident only if, as a result of the accident, you are unable to hold employment you would have held during this period had the accident not occurred, or you are deprived of Employment Insurance benefits.

If you are still unable to work 6 months after the accident, your situation will be reassessed based on an employment you could have held at the time of the accident, taking into account, in particular, your training and work experience. You may be entitled to an income replacement indemnity based on this employment.

If the nature of your injuries or impairment entitles you to an income replacement indemnity that must not be less than a specific prescribed amount

As of the date that is 12 months following the date of your accident, your income replacement indemnity could be calculated based on a gross income that must not be less than the average weekly earnings of Québec workers.

The injuries and impairment granting entitlement to such an indemnity are prescribed by regulation and include the following:

  • complete paraplegia or tetraplegia;
  • a traumatic brain injury resulting in one or more functional alterations of the brain, as determined by regulation, for which the combined percentages for impairment add up to at least 50%;
  • at least two amputations of different limbs, as determined by regulation;
  • a loss of vision;
  • third-degree burns causing functional impairment or impairment to the esthetic of the face, for which the combined percentages for impairment add up to at least 75%;
  • an affective or mental disorder resulting in, at a minimum, a major disruption of personal and social functioning or an altered sense of reality;
  • a combination of different types of impairment determined by regulation, for which the combined percentages for impairment add up to at least 85%.

Duration of the income replacement indemnity

Your income replacement indemnity will continue to be paid for however long we determine you are unable to work.

If you were under 64 years of age at the time of the accident

Starting on your 65th birthday, your income replacement indemnity will be reduced by 25%. It will then be reduced by 50% on your 66th birthday and by 75% on your 67th birthday. If you are still entitled to an indemnity on your 67th birthday, the amount will be reassessed and you may be entitled to receive an indemnity until your death.

If you were 64 at the time of the accident 

Your income replacement indemnity will be reduced by 25% at the beginning of the 2nd year following the date of the accident, by 50% at the beginning of the 3rd year, and by 75% at the beginning of the 4th year. If you are still entitled to an indemnity at the beginning of the 4th year, the amount will be reassessed and you may be entitled to receive an indemnity until your death.

Calculation of the income replacement indemnity paid until an accident victim's death

The income replacement indemnity paid until an accident victim’s death is calculated as follows:

40% × income replacement indemnity at 67 years of age or at the beginning of the 4th year after the accident1 ×
number of days during which an indemnity was received2 ÷ 14,6103

  1. For the purposes of this calculation, the amount of the income replacement indemnity does not take into account the reduction based on age.
  2. The number of days between the accident victim’s 18th birthday and the day before his or her 65th birthday.
  3. The number of days cannot be more than 14,610, which corresponds to 40 years.  

If the income replacement indemnity paid until death is greater than the indemnity to which you are entitled at 67 years of age or at the beginning of the 4th year following your accident, the income replacement indemnity paid until death is the indemnity you will receive as of age 67, or as of the 4th year following your accident.

Here are two examples that illustrate how the income replacement indemnity paid until an accident victim’s death is calculated.

  • The examples are based on an income replacement indemnity for a person with no spouse or dependants.
  • For the purposes of the examples, amounts have been rounded off to the nearest dollar.
  • For the purposes of the examples, the annual indexation of gross income was not applied.
Example 1
  • Violet was 42 years old at the time of her accident and was never able to return to work afterward.
  • Her income replacement indemnity was calculated based on a gross annual income of $50,000.
  • Her annual income replacement indemnity was $33,333.
  • When Violet turned 67, she was still entitled to an income replacement indemnity, but the amount of the indemnity had been reduced by 75% and amounted to $8,333 per year.
  • Between the time of her accident and the day before her 65th birthday, Violet had received an income replacement indemnity for 8,395 days. 
Calculation of the income replacement indemnity paid until an accident victim’s death

On Violet’s 67th birthday, the SAAQ calculated the income replacement indemnity to which she would be entitled until her death, as follows:

40% × $33,333 (income replacement indemnity at 67 years of age, without the reduction) × 8,395 days (number of days during which Violet received an indemnity) ÷ 14,610

Steps
  1. Multiply the amount of the income replacement indemnity to which Violet was entitled at age 67 by 40% - $33,333 × 40 ÷ 100 = $13,333
  2. Multiply the result obtained in Step 1 by the number of days during which Violet received an income replacement indemnity - $13,333 × 8,395 days = 111,930,535
  3. Divide the result obtained in Step 2 by 14,610 - 111,930,535 ÷ 14,610 = $7,661

Annual income replacement indemnity payable until Violet’s death: $7,661

Violet is entitled to an annual income replacement indemnity in the amount of $7,661 from her 68th birthday until her death.

Example 2
  • Shane was 22 years old and a full-time student at the time of his accident.
  • As a result of the accident, Shane was unable to complete his studies or work.
  • Shane was entitled to an income replacement indemnity based on the average weekly earnings of Québec workers, which was equal to $53,382 per year.
  • Shane’s annual income replacement indemnity was $35,178.
  • When Shane turned 67, he was still entitled to an income replacement indemnity, but the amount of the indemnity had been reduced by 75% and amounted to $8,795 per year.
  • Between the time of his accident and the day before his 65th birthday, Shane had received an income replacement indemnity for 15,644 days.
  • The maximum number of days that can be taken into consideration when calculating the income replacement indemnity paid until an accident victim’s death is 14,610. 
Calculation of the income replacement indemnity paid until an accident victim’s death

On Shane’s 67th birthday, the SAAQ calculated the income replacement indemnity to which he would be entitled until his death, as follows:

40% × $35,178 (income replacement indemnity at 67 years of age, without the reduction) × 14,610 days (maximum number of days that can be taken into consideration) ÷ 14,610

Steps
  1. Multiply the amount of the income replacement indemnity to which Shane was entitled at age 67 by 40% - $35,178 × 40 ÷ 100 = $14,071
  2. Multiply the result obtained in Step 1 by the number of days during which Shane received an income replacement indemnity - $14,071 × 14,610 days = 205,577,310
  3. Divide the result obtained in Step 2 by 14,610 - 205,577,310 ÷ 14,610 = $14,071

Annual income replacement indemnity payable until Shane’s death: $14,071

The income replacement indemnity to which Shane is entitled until his death is greater than the original indemnity reduced by 75%.

  • Income replacement indemnity reduced by 75% = $8,795
  • Income replacement indemnity paid until an accident victim’s death = $14,071

Shane is entitled to an annual income replacement indemnity in the amount of $14,071 from his 68th birthday until his death.

If you are 65 at the time of the accident

Your income replacement indemnity will be reduced by 25% at the beginning of the 2nd year after the date of the accident, by 50% at the beginning of the 3rd year, and by 75% at the beginning of the 4th year. Payment of your indemnity will cease completely at the end of the 4th year after the date of the accident.

If you are under 16 years of age and held or would have held employment

You are entitled to an income replacement indemnity as long as that employment remains available and you are unfit to hold it because of the accident. However, the indemnity ceases to be paid at the end of the school year in which you turn 16.

If you are a student aged 16 or older and were attending an educational institution on a full-time basis and you held or would have held employment

You are entitled to an income replacement indemnity as long as the employment remains available and you are unfit to hold it because of the accident. However, the indemnity ceases to be paid on the scheduled date of completion of studies at the time of the accident. 

If your state of health deteriorates

In the event of a deterioration in your state of health – on condition that this deterioration is directly related to the same traffic accident–, you may request that we reassess your case.

About income replacement indemnities…

  • They are not considered taxable income, but they may have an impact on certain tax credits, on benefits paid by other entities, such as the Commission des normes, de l’équité, de la santé et de la sécurité du travail and the Ministère du Travail, de l’Emploi et de la Solidarité sociale, as well as on amounts received under social programs such as the Québec Parental Insurance Plan or the Québec Pension Plan.
  • They must be reported in your Québec income tax return, but not in your federal income tax return.
  • They are subject to garnishment for spousal or child support payments.
  • They are indexed every year.

Last update: June 29, 2022