Years ago, I was in the middle of a three-day dependency priority dispute arbitration hearing involving a 22-year-old claimant who lost his right arm after a serious motorcycle crash. During his testimony, opposing counsel started asking him questions about how much money he used to spend on toiletries, and then broke it down further by asking him the cost of shampoo, toothpaste, and dental floss. The claimant broke down and started to cry, explaining sadly that since the accident he had been unable to floss his teeth with only one arm …
This is why whenever I receive a new referral involving a priority dispute, death benefits claim, or optional benefits issue, I take a moment before identifying the underlying issues and do a little prayer, that goes something like this: “Please don’t be a dependency case”.
More times than not, my prayers go unanswered.
Who counts as a “dependant” under Ontario’s standard auto insurance policy? The answer can determine whether someone is entitled to death benefits, optional benefits, or even which insurer pays under section 268(2) of the Insurance Act. And the stakes are about to get higher in July 2026, when default SABS benefits shrink, and optional benefits become more valuable.
Claims handlers must possess a thorough understanding of the definition of a “dependant” under the SABS and the implications of being “principally dependent for financial support or care.”
Statutory Definition of “Dependant” under the SABS
Ontario’s SABS defines a dependant as someone who is principally dependent for financial support or care on the named insured or the named insured’s spouse:
(7) For the purposes of this Regulation,
…
(b) a person is a dependant of an individual if the person is principally dependent for financial support or care on the individual or the individual’s spouse; [emphasis added]
This includes both financial and care dependency. Where a person needs financial support or care from someone else, and mostly relies on a named insured or spouse for those needs, the person in need would be the named insured’s/spouse’s ‘dependant’ – regardless of age or relationship.
This is important because dependants are “insured persons” under the policy and are not only entitled to death benefits as dependants, but are also entitled to any available optional benefits under the policy. This latter entitlement will become extra important in July 2026 when the default benefits under the SABS are reduced significantly.
Legal Criteria for Dependency: The Miller v. Safeco Factors
The leading decision of Miller v. Safeco outlines four core factors for assessing dependency: 1 – duration of dependency (appropriate timeframe to assess the dependency level); 2 – the amount of dependency (how much the claimant depends on others); 3 – the financial and other needs of the alleged dependent (accounting of income vs. expenses); 4 – the ability of the alleged dependant to be self-supporting (capacity to earn). The Court of Appeal has stated that the general standard of living within the family unit should not be considered when determining dependency.
Choosing the Appropriate Time Frame for Analysis
Dependency should be assessed over a timeframe that fairly represents the relationship at the time of the accident. In many cases, we look at the 12-month period before the accident, especially if the claimant’s income/needs were consistent during that period. But shorter or longer periods may be appropriate depending on the claimant’s stability and life circumstances.
Financial Dependency vs. Care Dependency
The SABS recognizes both financial and care dependency. A person need not be financially dependent to qualify. They may depend on someone else for significant caregiving. Claims handlers must evaluate both criteria, especially where the claimant is elderly, disabled, or has other types of special needs. Other relevant factors include social, emotional and physical care.
The “51% Rule”: Interpreting Principal Dependency for financial support
Courts and arbitrators typically apply the 51% rule to determine principal financial dependency: If a claimant’s available resources at the time of the accident covered at least 51% of their needs during the relevant timeframe, they were not “principally dependent” on anyone because they were able to fund most of their needs by themselves. Conversely, if the claimant was able to fund less than 50% of their needs by themselves, they were principally dependent on one or more persons to fund most of their needs.
This part of the analysis causes the most grief for claims handlers and lawyers alike, which is why I tend to loathe some dependency approaches I see on my files. There is nothing worse than watching a lawyer gather information from a family about how much money they used to spend on snacks.
Thankfully, there has been a shift to assessing dependency based on statistical data about the cost of an average person’s needs. A good starting point when assessing dependency is to determine what the person’s income was (employment, pensions, benefits, etc) and compare it to the Market Basket Measure for “Persons not in economic families” (single person). For example, if the claimant was earning $12,000/year, and the MBM for a single person in Hamilton was $22,472 during the same period, the person’s earnings would cover 53% of their (MBM) needs. This means – pursuant to the 51% rule – that the person was not principally dependent on anyone for financial support under the “mathematical approach” because they were able to fund more than 51% of the financial needs by themselves. To be clear, in this example there is no question that the person would be dependent on others to fund the balance of their needs, because they are only able to fund 53% by themselves. But being dependent on others to fund 47% of the person’s needs is not principal dependency.
The 51% rule serves as an initial quantitative reference and is just one of the factors we look at to assess financial dependency. The mathematical approach is not solely definitive when considered independently. That said, most cases have found principal independency where a claimant was able to fund more than 51% of their financial needs by themselves.
Ability to be Self Supporting: The Big Picture Rule
Miller also requires us to assess the claimant’s ability to be self-supporting. This is where we assess dependency by considering the “big picture”, looking at the claimant’s education, talents, abilities and disabilities, employment availability, and labour supply and demand.
For example, some students work during the school year to fund their post-secondary school education. Other students receive grants/scholarships or fall into student loan debt to go to school. Other students rely on family members to get through school. Looking at the big picture, the working student might be funding their schooling so they can graduate, enter the workforce, and become financially independent.
It might be unfair (for example, in a death benefit case) to find that a claimant funding their own way through school by working is financially independent, while a student receiving financial support for the same type of expenses from their parents is financially dependent. All things being equal, the working student wouldn’t be entitled to a death benefit while the non-working student would get a death benefit. Similarly, the working student wouldn’t be entitled to claim any optional benefits if they were not a dependant under the policy, while the student receiving grants/scholarships/family support would qualify.
This is just one example of how looking at the big picture plays an important role in assessing dependency.
Practical Guidance for Investigating Dependency Claims
Claims handlers and lawyers should gather complete financial data, evaluate support and care provided, consider the timeframe, and apply “the math” and “big picture” assessments. I don’t put much stock into “dependency questionnaires” because most people don’t understand how to complete them, and often the information collected isn’t accurate or useful. I much prefer contextual interviews and/or examinations under oath to assess dependency.
I recommend using a checklist that includes income vs. needs analysis and personal abilities pre-accident:
- Review 12-month financials (income vs. needs)
- Consider care needs (especially for kids, elderly, disabled)
- Apply the 51% rule—then step back and look at the big picture
- Avoid over-relying on questionnaires
- Use contextual interviews or EUOs when possible
Conclusion
Determining dependency under the SABS requires both calculation and context. The 51% rule, Miller factors, and real-world evidence must be integrated to understand whether a claimant was chiefly dependent on the named insured or spouse for financial support or care. By combining legal principles with thorough investigation, claims handlers can arrive at conclusions that are legally sound and practically defensible.
I’ve conducted hundreds of dependency EUOs and argued many hearings for insurers. If you need help unpacking a tricky claim or refining your investigation strategy, feel free to reach out.