In fatal accident litigation, the plaintiffs are entitled to claim an amount that is sufficient to allow them to maintain the same standard of living as they had enjoyed when the deceased had been alive. In practice, this requires that the court calculate the percentage of the deceased’s after-tax income that would have benefited the survivors directly. In Canada, this percentage is called the dependency rate, and most experts conclude that the dependency rate of one member of a couple is approximately 70 percent of the deceased spouse’s (after-tax) income.
- In this issue, we examine whether or not the dependency rate increases or decreases as family income increases (or decreases). In particular, some experts have argued that the survivor’s dependency decreases as the deceased’s income increases. For example, whereas the widow of a man with low income might need, say, 80 percent of his income in order to be left in the same financial state as if he had lived, the widow of a wealthy man might need only 50 percent.
- In this article, we will show that the dependency rate does not differ significantly from the lowest to the highest quintiles.