07/23/2026
WSIB Closes the Second Injury and Enhancement Fund: Key Considerations for Employers
Ontario employers can no longer rely on the Second Injury and Enhancement Fund (SIEF) to reduce the claim costs associated with a worker’s pre-existing condition or impairment.
The Workplace Safety and Insurance Board (WSIB) confirmed the closure on July 16, 2026, after completing an audit of the program. The closure took effect retroactively on June 16, 2026, and is reflected in the WSIB’s revised Operational Policy Manual Document No. 14-05-03.
The Change at a Glance
SIEF previously allowed certain claim costs to be removed from a Schedule 1 employer’s record when a worker’s prior disability or underlying medical condition contributed to an accident or made the resulting injury more serious or prolonged.
Following the program’s closure:
- employers generally cannot obtain SIEF relief on claims for which relief had not already been granted;
- relief already in place will continue for the life of the applicable claim;
- amounts granted by June 16, 2026, will generally remain unchanged unless an appeal or an eligible outstanding request results in an adjustment; and
- existing and eligible outstanding relief will continue to factor into the calculation of risk-adjusted employer premium rates.
The revised Policy applies to decisions made on or after June 16, 2026, regardless of when the underlying workplace accident occurred.
Treatment of Outstanding Requests
The effective date of the closure and the deadline communicated by the WSIB require careful attention.
The revised Policy states that requests submitted before June 16, 2026, will continue to be considered. The WSIB will decide whether those employers qualify for relief and will make any necessary cost adjustments.
In its July 16 announcement, however, the WSIB indicated that it would review requests received before July 16, 2026. Employers with a request submitted during the period between June 16 and July 16 should therefore confirm its status directly with the WSIB.
Where relief is granted or adjusted after June 16 because of a qualifying earlier request, the resulting amount will still be considered in the employer’s risk-adjusted premium rate.
Why the Closure Matters
SIEF served an important financial function for Schedule 1 employers. Under the Workplace Safety and Insurance Act, 1997, it allowed the WSIB to transfer eligible compensation and health-care costs away from an accident employer when:
- a worker’s prior disability contributed to the workplace accident; or
- a pre-existing condition increased or prolonged the effects of a compensable injury.
The end of the program does not change the WSIB’s obligation to assess whether an injury arose out of and in the course of employment. It does, however, remove a mechanism employers previously used to limit the financial consequences of claims involving non-work-related medical factors.
A New Approach for Employers
Without access to SIEF relief, employers should examine entitlement and causation issues early in the claim process.
When medical or factual information points to a pre-existing condition or pre-accident impairment, employers should consider whether the workplace incident caused the diagnosed condition, materially contributed to it, or merely coincided with an unrelated medical issue. Where the evidence supports a different conclusion from the one reached by the WSIB, an appeal of the initial entitlement decision may be appropriate.
A worker will not automatically be denied benefits simply because a prior condition exists. If the workplace incident contributed significantly to an injury or illness, entitlement may still be granted.
The existence of a prior condition can nevertheless remain relevant to the duration and scope of benefits. Employers should ensure that the WSIB considers whether the worker has recovered from the work-related injury and whether any continuing symptoms are instead attributable to an underlying condition.
Two WSIB policies may be particularly relevant:
OPM Document No. 15-02-03, Pre-Existing Conditions; and
OPM Document No. 15-02-04, Aggravation Basis.
Depending on the medical evidence and the circumstances of the claim, applying these policies may lead the WSIB to limit or end ongoing benefits.
Practical Next Steps
Employers should now consider:
- confirming the status of any SIEF request submitted before July 16, 2026;
- verifying that existing SIEF credits remain correctly applied to the relevant claims and premium calculations;
- identifying claims in which a prior condition or impairment may affect initial or ongoing entitlement;
- reviewing medical information promptly and obtaining clarification where the cause of a worker’s symptoms is unclear; and
- monitoring entitlement decisions and appeal deadlines closely.
The closure of SIEF makes early claim review and active claims management increasingly important. Employers should assess each case on its own evidence and seek advice where medical causation or ongoing entitlement is disputed.
For assistance with the effect of SIEF’s closure or with a specific WSIB claim, please contact me.
