A deductible benefit is a benefit that is deducted in the loss of earnings calculation, thus resulting in a lower claim amount. A non-deductible benefit is a benefit that is not deducted from the loss of earnings calculation, and thus has no impact on the value of the claim.
Deductibles
• Ex contractu / ex lege benefits received from the employer (e.g. sick leave)
• Benefits received from insurance policies that were a condition of employment (e.g. disability income)
• Benefits paid in terms of the COIDA, where these are paid because of the incident
• UIF pay-outs where these are paid because of the incident
Non-deductibles
• Benefits received from insurance policies maintained by the client
• Ex gratia payments, paid by the employer (e.g. gratuitous leave pay)
| Industrial Psychologists should indicate the nature of benefits paid to the claimant after an incident. |
State grants
Legal parties disagree on whether disability and old age pension grants are deductible in loss of earnings claims.
Rulings regarding disability grants:
• According to Modibedi v RAF, ‘income’ as contemplated by regulation 19 (1) (k) of the Social Assistance Act 13 of 2004 excludes social assistance which in terms of section 1 means ‘social grant’ which includes a disability grant. The context of this case was a plaintiff claiming loss of support where the deceased’s only income was a disability grant. It was unsuccessful due to the grant not being defined as income for the purposes of calculating the loss.
• Subsequent to this, Mullins v RAF ruled that loss of earnings is distinguishable from the loss of support.
• The Moropane v RAF judgment ignored the disability grant in a loss of earnings claim.
• Kapa v RAF ruled that disability grants should be deducted to avoid double compensation.
If disability grants are deducted, SASSA documents should be used to value the total payments.
| Industrial psychologists should indicate whether claimants received state grants because of the incident. |