Quick Links
Customer Centres
Consumer Price Index FAQs
An explanation of the cost of living adjustments made by WorkSafeBC to reflect changes in the Consumer Price Index (CPI).
Quick Facts
Why does WorkSafeBC increase payments of compensation at CPI minus one percent?
The formula used to calculate cost of living adjustments, CPI minus one percent, is set out in section 25 of the Workers Compensation Act. This formula is similar to those used by other workers' compensation boards in Canada, such as WCB Alberta and Workplace Safety & Insurance Board Ontario.
If the CPI goes up less than one percent or goes down, are my benefits reduced?
No, if the CPI goes up less than one percent or goes down, benefits are not reduced. Benefits are left unchanged from their previous level.
How are cost of living adjustments calculated for WorkSafeBC periodic payments of compensation?
WorkSafeBC calculates Cost of Living Adjustments using the formula provided by Section 25 of the Act. This formula is CPI minus 1% (to a maximum of 4%). If the formula results in a percentage of less than 0%, no adjustment is made to the periodic payments. If the formula results in a percentage greater than 4%, it is reduced to 4%. To determine the CPI percentage to be applied in January of a given year, WorkSafeBC compares the national CPI for October of the previous year with that for October of the year prior to the previous year.
For example: WorkSafeBC’s cost of living adjustment in January 2004 was 0.58%. This was determined by taking the CPI change from Oct 2002 to Oct 2003 and subtracting 1%:
The CPI at Oct 2003 = 122.4
The CPI at Oct 2002 = 120.5The CPI increase based on WorkSafeBC’s method is (122.4 - 120.5)/120.5 = 1.58%
Therefore, the increase at Jan 1, 2004 was 1.58% minus 1% = 0.58%
The October CPI figures are published under Regulation & Policy in the Board Minutes. On that page, on the left side of the column, there is a link for CPI adjustments for December 2005, December 2004, and December 2003. Select the desired year, and then click on "Board Minute" under "Period Payments and Dollar Amounts". The October CPI figures used to calculate the cost of living adjustment for the start of the following year is shown in the second paragraph.
What payments are subject to cost of living adjustments?
Cost of living adjustments are applied to periodic payments of compensation, including wage loss benefits and permanent disability awards, made continuously in respect of an injury or a death occurring more than 12 months before the date of the adjustment.
If payments on a claim are started or restarted more than 12 months after the injury or death, the worker or dependant receives the benefit of any cost of living adjustments occurring in the interim period as if he or she had been continuously paid since the date of injury or death.
Please refer to the following excerpt for more details
Section 25 of the Workers Compensation Act provides the following:
General indexing factor
25 (1) For the purposes of this section, the Board must, as of January 1 of each year,
(a) determine the percentage change in the consumer price index for Canada, for all items, for the 12 month period ending on October 31 of the previous year, as published by Statistics Canada, and
(b) subtract 1% from the percentage change determined under paragraph (a).
(2) The percentage resulting from calculations made under subsection (1) must not be greater than 4% or less than 0%.
(3) On January 1 of each year, the Board must adjust, in accordance with subsection (4), the periodic payments of compensation made in respect of an injury or a death occurring more than 12 months before the date of the adjustment.
(4) For the purposes of subsection (3), the Board must adjust the periodic payments of compensation to be paid in that calendar year for the injury or death by the percentage determined under subsection (1).
(5) If the Board starts or restarts periodic payments of compensation for an injury or a death that occurred more than 12 months before the payments are started or restarted, the Board must, under this section, adjust all periodic payments as if the payments were made continuously from the date of injury or death.
The most recent cost of living adjustments are set out below:
| Date | Percentage |
| January 1, 2003 | 2.17 |
| January 1, 2004 | 0.58 |
| January 1, 2005 | 1.29 |
| January 1, 2006 | 1.64 |
| January 1, 2007 | 0.00 |
If required, earlier figures, (calculated under the former Section 25 as it read prior to June 30, 2002) can be obtained by contacting WorkSafeBC’s Statistical Services Department.
See the Rehabilitation Services & Claims Manual Volume II, chapter 7, policy item #51.00 which discusses Cost of Living Adjustments.
 |
 |
To view PDF documents you must have Adobe Acrobat Reader installed on your system. To obtain a copy of the free reader visit the Adobe web site. |