What Are Structured Settlements in Ontario Personal Injury Law?
What Is a Structured Settlement? A Guide for Ontario Injury Victims
When someone is injured in an accident and receives compensation, they have a crucial decision to make: take a lump sum payment, or set up a structured settlement.
At Pranzitelli Law Firm, we help injured clients navigate every stage of their personal injury claims—including how and when they get paid.
Let’s break down how structured settlements work, who they’re for, and why they might be the smartest long-term option for your recovery and financial future.
What Is a Structured Settlement?
A structured settlement is a customized financial arrangement where the compensation you receive for your injuries is paid out in installments over a fixed period of time—usually starting with a bi-weekly or monthly schedule and lasting a minimum of five years.
This option is only available in personal injury settlements, and once it's in place, it cannot be changed.
You can choose:
How often you receive payments (e.g. monthly or annually)
When you want larger lump sums (e.g. future medical expenses, children's education, etc.)
How long the settlement lasts (e.g. for life or a fixed number of years)
Why Choose a Structured Settlement?
✅ Stability & Security
Injured individuals often rely on their compensation to cover lost wages, medical care, and future needs. A structured settlement ensures your money doesn’t run out too quickly.
✅ Tax-Free Payments
Unlike regular investment income, structured settlement payments are tax-free in Canada. That means more money stays in your pocket—and out of CRA’s hands.
✅ Preserve Government Benefits
Structured payments are not considered income, so they won’t disqualify you from accessing government assistance programs, like the Ontario Disability Support Program (ODSP), or certain tax credits.
✅ No Investment Risk
Structured settlements are managed by highly secure annuities, not stock markets or mutual funds. There’s no gambling on high-risk investments or annual management fees.
Are There Any Downsides?
Structured settlements aren’t for everyone. Here’s what to consider before locking one in:
❌ No Flexibility
Once your structured settlement is finalized, it can’t be changed. You can’t access more money upfront or shift your payment schedule later—even if your circumstances change.
❌ Delayed Access to Lump Sums
If you want all your money right away, this option may feel restrictive. Some clients prefer a lump-sum payment so they can buy a home, pay down debts, or invest on their own terms.
So… What’s Right for You?
There’s no one-size-fits-all answer. Your compensation is meant to support you—not stress you out.
At Pranzitelli Law Firm, our experienced personal injury lawyers help clients choose the best compensation structure based on:
Medical needs and recovery timeline
Age and dependents
Ongoing care costs
Financial literacy and spending habits
Future goals
Talk to an Ontario Personal Injury Lawyer Today
If you’ve been injured in a car accident or other serious incident, your settlement should work for you—not the other way around.
Whether you’re exploring structured payments or want to weigh your options between lump sum and instalments, we’re here to guide you through the decision with clarity and confidence.
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