Bill 13 amends the Firefighters’ Compensation Act and the Workers’ Compensation Act to increase and rework survivors’ benefits, introduce mandatory pension set‑asides, modernize impairment ratings and update core definitions. The law creates a new benefit framework for deaths on or after July 1, 2025 (including a spouse benefit equal to 90% of average net earnings up to age 65) and adds structured child benefit scales.
Beyond benefit levels, the bill standardizes how average earnings are calculated and caps them against the New Brunswick Industrial Aggregate Earnings, replaces rating schedules with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, converts statutory language to gender‑neutral terms, and imposes administrative limits and funding tools (including a two‑year window for enforcing certain overpayment recoveries and authority for the Commission to fund deficits over up to 15 years). These changes affect employers, compensation fund managers, municipal firefighter employers and insurers.
At a Glance
What It Does
Establishes a new survivors’ benefit regime for deaths on or after July 1, 2025 (notably a spouse benefit equal to 90% of average net earnings to age 65), requires the Commission to set aside 10% of certain benefit payments to fund a pension at age 65, adopts the AMA Guides for permanent impairment evaluations, and revises earnings and eligibility calculations across both Acts.
Who It Affects
Municipalities and rural communities that employ firefighters, private and public employers subject to the Workers’ Compensation Act, the Workers’ Compensation and Firefighters’ Compensation Commissions, injured workers and their dependants, and insurers or administrators that interact with compensation claims and annuity purchases.
Why It Matters
The bill materially increases survivor replacement rates and creates recurring actuarial obligations (the 10% set‑aside and higher benefit percentages) while giving the Commission explicit tools to manage funding shortfalls and overpayment recovery — shifting both benefit generosity and fiscal-management responsibilities onto the compensation system.
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What This Bill Actually Does
Bill 13 introduces two parallel sets of changes: benefit and computation reforms, and administrative/technical updates. On the benefit side, it creates a new statutory scheme for deaths on or after July 1, 2025 that pays a surviving dependent spouse up to age 65 an amount equal to 90% of the deceased firefighter’s or worker’s average net earnings as determined by the Commission.
The bill also prescribes a graduated schedule for child benefits tied to the New Brunswick Industrial Aggregate Earnings, provides ongoing reviews tied to that index, and preserves continued payments for permanently incapable children regardless of age.
To smooth retirement outcomes, the Commission must set aside 10% of benefits paid to surviving spouses as capital to be used to provide a pension at age 65; if the set‑aside capital would buy an annuity below a 60% threshold of the Industrial Aggregate Earnings, the Commission may instead pay the accumulated capital at age 65. The legislation also phases increases to pre‑existing benefit percentages for deaths occurring before July 1, 2025 across multiple historical cohorts of deaths, so older claims move incrementally toward higher replacement ratios on specified dates.On the technical side, the bill modernizes the statutory language (moving to gender‑neutral pronouns and updating family‑member definitions), tightens the definition of average earnings (explicitly allowing the Commission to consider likely wage progression but capping earnings at the Industrial Aggregate Earnings), and replaces earlier, regulation‑based impairment rating schedules with the American Medical Association’s Guides to the Evaluation of Permanent Impairment.
That substitution standardizes medical evaluation criteria but also creates a likely change in valuation methodology for permanent impairment awards.Administratively, the Workers’ Compensation Act gains a provision that gives the Commission exclusive jurisdiction to recover overpayments but limits enforcement actions unless notice has been provided and generally forbids enforcement more than two years after the Commission first knew of an overpayment. The bill also requires the Commission, if it runs a going‑concern funding deficit, to take steps to assess and collect funds to cover that deficit over a reasonable period, up to a maximum of 15 years.
Together those provisions both constrain and empower the Commission in debt recovery and funding‑policy choices.
The Five Things You Need to Know
For deaths on or after July 1, 2025 the Commission must pay a surviving dependent spouse up to age 65 benefits equal to 90% of the deceased’s average net earnings, with annual indexing tied to the New Brunswick Industrial Aggregate Earnings.
The Commission must set aside 10% of benefits paid to surviving dependent spouses (and certain other spouse benefit streams on and after July 1, 2025) to accumulate capital used to provide a pension at age 65; if annuity purchase would be less than 60% of the Industrial Aggregate Earnings, the Commission may instead pay the accumulated capital at 65.
The Acts replace bespoke, regulation‑based impairment rating schedules with the American Medical Association’s Guides to the Evaluation of Permanent Impairment (AMA Guides) as the standard for assessing permanent impairment.
The Commission gets exclusive jurisdiction to recover overpayments but cannot enforce a debt more than two years after it first had knowledge of the overpayment unless it first provided notice to the recipient.
If the Commission incurs a going‑concern funding deficit, the Act requires it to assess, levy and collect sufficient funds to remedy the deficit within a reasonable period, up to a maximum of 15 years.
Section-by-Section Breakdown
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Modernize wording and clarify 'average earnings'
The bill rewrites the definition of "average earnings" to instruct the Commission to select the remuneration metric that best represents the firefighter’s earnings, allows upward adjustment for probable wage progression based on age and training, and caps average earnings at a statutory maximum (the New Brunswick Industrial Aggregate Earnings or an equivalent maximum). At the same time the Act replaces many gendered pronouns and outmoded family descriptors with gender‑neutral terms and simpler family categories — a broad housekeeping change that reduces ambiguity and aligns statutory language with contemporary drafting norms.
New survivors’ scheme for deaths on/after July 1, 2025
Section 20.1 establishes a standalone survivors’ benefits regime for deaths occurring on or after July 1, 2025: a dependent surviving spouse receives up to age 65 benefits equal to 90% of average net earnings, benefits are reviewed annually and adjusted in line with the Industrial Aggregate Earnings, and child benefits are set out as fixed percentages of that aggregate for defined age bands. The section also grants the Commission discretion to pay guardians directly, to pay benefits directly to older children in certain circumstances, and to continue lifetime payments for children who are permanently incapable of earning.
Adopt the AMA Guides for permanent impairment
Multiple provisions repeal references to an older regulation‑prescribed rating schedule and substitute the American Medical Association’s Guides to the Evaluation of Permanent Impairment as the controlling methodology. Practically, this standardization changes the baseline medical criteria used to quantify permanent impairment, which can alter award sizes and potentially increase medical‑expertity requirements in adjudication and appeals.
Mandatory 10% set‑aside and annuity threshold
The Act requires the Commission to set aside 10% of certain surviving spouse benefit payments (and phases that into other benefit streams on July 1, 2025) to accumulate capital for a pension to be paid at age 65. Where the accumulated capital, when used to buy an annuity as regulated, would produce less than 60% of the Industrial Aggregate Earnings, the Commission may pay the accumulated capital (and its return) at age 65 instead of purchasing an annuity. The bill also updates cross‑references and raises the set‑aside percentage in some places from 5% to 10% to reflect the new pension funding approach.
Parallel survivors’ regime for non‑firefighter workers
Section 38.501 mirrors the firefighters’ approach for workers: it sets a 90% spouse replacement ratio for deaths on or after July 1, 2025, prescribes child benefit percentages tied to the Industrial Aggregate Earnings, allows direct payments to older children, and permits continued payments for children permanently incapable of earning. The insertion harmonizes outcomes across the two Acts and aligns indexing and review mechanics.
Overpayment recovery, funding rules and deficit policy
The bill clarifies that the Commission has exclusive jurisdiction to determine and recover overpayments and adds a limitation: unless the Commission gave notice, it cannot enforce recovery as a debt more than two years after it first knew of the overpayment. Separately, the Commission’s actuarial statements and accounting will now include an explicit going‑concern reserve (positive or negative) and the Commission must, if a going‑concern deficit arises, take steps to fund that shortfall over a reasonable period up to 15 years — a formal recognition that funding shortfalls may be amortized rather than immediately charged to employers.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Surviving dependent spouses of workers and firefighters: they receive substantially higher replacement rates (90% for deaths on/after July 1, 2025) and a statutory guarantee of annual reviews indexed to the Industrial Aggregate Earnings, improving near‑term income replacement.
- Dependent children of deceased workers: the Act fixes child benefit percentages by age bands and preserves lifetime payments for children permanently incapable of earning, creating clearer expectations for guardians and claim administrators.
- Injured workers and claimants across the province: the move to the AMA Guides standardizes impairment evaluations and may produce more consistent medical determinations across claims.
- Beneficiaries of small annuity pools: the 10% set‑aside builds a capital accumulation mechanism to fund pensions at age 65, offering a deferred benefit that can reduce reliance on ad hoc lump sums later in life.
- Regulatory administrators and counsel: clearer statutory language (gender‑neutral, updated family definitions) and exclusive recovery jurisdiction simplify some procedural aspects of claims handling and litigation strategy.
Who Bears the Cost
- Employers and rate‑paying employers: higher statutory replacement rates and the Commission’s authority to collect funds to repair a going‑concern deficit (over up to 15 years) imply potential higher assessments or levies on payrolls.
- The Accident Fund/Compensation Commission: greater benefit generosity and mandatory set‑asides increase near‑term cash outflows and create additional investment and administrative responsibilities for tracking set‑aside capital and managing annuity purchases.
- Municipalities and rural communities that employ firefighters: enhanced job‑protection language and elevated survivor benefits increase potential long‑term liabilities for municipal payroll assessments and operational planning.
- Insurers and annuity markets: the 60% threshold and option to deliver accumulated capital rather than an annuity shift how small annuity purchases are handled and could affect market demand for small pensions.
- Employers with cross‑jurisdictional workers: the retained rule that work performed partially outside the province is to be treated as performed in the province increases exposure for employers whose workers split time across jurisdictions.
Key Issues
The Core Tension
The central dilemma is between materially improving income replacement for survivors and preserving the fiscal integrity of the compensation system: the bill increases benefits and introduces pension accumulation, but those improvements require either higher employer assessments, different investment outcomes or tighter administrative choices — none of which are cost‑neutral and all create distributional and implementation trade‑offs.
The bill raises survivor replacement ratios and simultaneously creates mechanisms intended to smooth the fiscal impact (the 10% set‑aside and the Commission’s authority to amortize funding deficits). Those trade‑offs matter: higher benefit levels increase the Commission’s actuarial liabilities immediately, while the set‑aside both reduces immediate disposable payments to spouses and defers some pension risk to accumulation and investment performance.
If investment returns are weak, the Commission may be left with larger unfunded obligations or pressure to increase employer assessments.
Adopting the AMA Guides standardizes impairment measurement but may produce winners and losers: some impairments that were previously rated higher under local schedules could be downgraded (or vice versa), triggering disputes, new expert costs and transitional claim‑valuation issues. The new two‑year enforcement window for overpayment recovery protects recipients from stale claims but also limits the Commission’s ability to reclaim sizable overpayments discovered late — raising questions about notice mechanics and record‑keeping expectations.
Lastly, the Act delegates considerable discretion to the Commission (pension vs annuity choice, discretionary payments to dependants, indexing mechanics), which promotes administrative flexibility but risks inconsistent decisions and litigation unless robust guidance and transparent policies follow.
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