CPP Disability Benefits, FAQ
Updated: Oct 31, 2020
If you suffer from mental or physical disability that is severe or prolonged such that you are unable to work regularly again in any gainful employment before age 65, and you have made sufficient contributions to Canada Pension Plan, then you may qualify for CPP Disability benefits.
This blog answers some of the most frequently asked questions concerning CPP Disability benefits:
Where do I apply for CPP Disability benefits?
Apply for CPP Disability at Service Canada or online at: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-disability-benefit.html
How much can I expect to receive in benefits?
CPP Disability pays a monthly benefit based on a flat rate ($505.79 in 2020) plus an amount based on your retirement contributions, so it varies depending on contributions made.
Maximum payment is $1,387.66 in 2020, and monthly child benefit at $255.03 in 2020.
You may receive up to 12 months retoractive payments from the date of receipt of your application when approved.
Is the CPP Disability benefit taxable?
Yes the benefit paid to you is taxable income.
Do I have to apply for CPP Disability if I am receiving Long Term Disability benefits?
Generally yes.
If your disability is severe and prolonged such that you are unlikley to regularly work again before age 65, then most LTD policies require you to apply for CPP Disability benefits as an offset to LTD benefits.
In otherwords, the LTD insurer will top up after CPP Disability is paid to you to your maximum LTD monthly benefit.
The LTD insurer will usually write to you to suggest you apply if it is likely you will be off all work indefinately.
If requested, you ought to apply and also appeal any denial to satisfy the LTD insurer of your cooperation.
Do I have to pay my LTD insurer the lump sum retroactive payment?
If you are in receipt of LTD benefits and receive a lump sum retroactive payment from CPP Disability that covers months when you received LTD payments, then typically, you must pay back the LTD insurer the amount you received for CPP Disability for those months. LTD will continue to offset such benefits going forward.
This is because most disability insurance policies or plans claim CPP Disablity benefits as an offset to LTD payments.
Check your LTD policy or plan wording for any offset provisions.
How much income can I earn while receiving CPP Disability benefits?
You can earn up to $5,800 income before taxes (2020 figure) without updating Service Canada or losing your CPP Disability benefits.
If you earn more than the allowable amount, then you must Inform Service Canada.
If I am denied, should I appeal the decision?
In general, yes. Do not be discouraged by a denial. Appeal within the time given in the decision notice.
If you have not made enough contributions to qualify, then an appeal is unlikely to be successful as you either made enough contributions or not. Review the contributions table and consider any divorce credits or child rearing years that apply to you to help fill gaps.
If the denial is based on whether your disability is severe or prolonged, you may have an excellent chance of succeeding at the reconsideration level or at a full hearing before the Social Security Tribunal of Canada.
For an initial FREE legal consultation concerning a denial of CPP Disability benefits, contact Scott Taylor at 604-534-6361