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The Canada Pension Plan (CPP) is a mandatory pension plan established in 1965 by the CPP Act. It is administered by the Federal Government through Service Canada, a federal agency under the authority of the Ministry of Employment and Social Development. Canadian workers and their employers fund the CPP through mandatory payroll deductions. Because it is sourced from workers and employers, and not from general government revenues, the CPP is essentially a defined benefit pension plan. Service Canada administers the Plan in all provinces and territories, except Quebec.

The Canada Pension Plan pays several types of benefits to eligible workers:

  • Disability benefits
  • Children’s benefits
  • Retirement pension
  • Post-retirement pension
  • Survivor's pension
  • Death benefit

What are Canada Pension Plan disability benefits?

Canada Pension Plan disability benefits are monthly payments made to disabled workers between the ages of 18 and 65. To qualify for payments, you must meet age, contribution, and disability requirements for payment. If you meet all three criteria, Service Canada will make a monthly disability payment to you for as long as you continue to meet the disability criteria or turn 65 years old. If you qualify for CPP disability and have children under the age of 18, or who are between the ages of 18 and 25 and attending school, then Service Canada will make a separate payment for each child.

Eligibility criteria for CPP disability benefits

You must meet the following eligibility criteria for CPP disability benefits to qualify for disability payments:

  • Be between 18 and 65 years old;
  • Meet the CPP contribution requirements; and
  • Have a severe and prolonged disability as defined by the CPP Act.

To determine if you may qualify for CPP disability, apply all three criteria to your situation:

Be between 18 and 65 years old

How old are you? To qualify for CPP disability benefits, you must be 18 to 65 years old and not have received CPP retirement payments for more than 15 months. If you meet the age requirements, then you can move on to see if you meet the contribution and disability requirements.

Meet the CPP Contribution requirements

Did you work for several years before becoming disabled? Meeting the minimum contribution requirements is the second criteria to qualify for CPP disability benefits. To meet the contribution requirement, you must have made the minimum qualifying payments in four of the last six years or three of the last five years, if you have contributed for at least 25 years. The four of six years, or three of five years, are calculated relative to your date of disability, not the date you apply for CPP disability benefits. In other words, you must have met the recent contribution requirements in the years leading up to when you became disabled as defined by the CPP Act.

If you are separated or divorced from a spouse, then you may qualify for CPP credit splitting for disability benefits, which can improve your chances of eligibility. Finally, if you were out of the workforce to be a primary caregiver for a child under the age of seven, then you may qualify for the child rearing provision. The child rearing provision will allow you to increase your contribution years, and possibly improve your eligibility period for disability benefits. 

Have a severe and prolonged disability as defined by the Canada Pension Plan Act

How serious is your disability? If you meet the age and contribution requirements, the last hurdle is to prove you have a severe and prolonged disability as defined by the CPP Act. A severe disability is a physical or mental disability that stops you from doing any substantially gainful employment on a regular basis. A prolonged disability is one that is long-term and of indefinite duration or is likely to result in death. It is not enough to prove you have a severe and prolonged disability; rather, you must show that the onset of the disability was before the end of your qualifying period. Failing to prove onset of disability during the qualifying period is a common mistake that will result in a denial of an otherwise legitimate claim for CPP disability benefits.

Eligibility criteria for the CPP children’s benefits

Do you have children? CPP children's benefits are based on a parent's disability, not the child's disability. Children become eligible for the CPP child benefit when their parent or guardian qualifies for CPP disability benefits. A child will become eligible for CPP children's benefits if the following criteria are met:

  • The child's parent or guardian has qualified for CPP disability;
  • the child is under age 18; or
  • the child is between the ages 18 and 25 and enrolled in full post-secondary education.

Amount of the CPP disability benefit and children's benefit

If approved for CPP disability, how much will you get? Your CPP disability payment amount is based on how much you have paid into the CPP program (your contribution history), plus a fixed payment amount. These two amounts are added together to arrive at your CPP disability payment. The average monthly payment in 2017 was $954.30 and the maximum payment was $1,335.83. These amounts get adjusted every year.

The children's payment is a fixed amount of money per child. In 2018, the children's payment amount is $244.64 and increases each year based on inflation.

For example, if you qualify for the average CPP disability payment and have two children under age 18, then your total monthly payment would be $954 (disability) + 244 (child 1) + 244 (child 2) = $1,442.

If you want to learn more, check our article on how Service Canada calculates your CPP disability payment amount

Applying for CPP disability

You can apply for CPP disability benefits by filling out the required forms and submitting them to the division of Service Canada that handles CPP disability claims. Service Canada has designated regional CPP disability processing centres, so it is important that you send your application to the right processing centre. The CPP disability program is a Federal program so everyone fills out the same forms. These forms include: the Application Form, the Questionnaire Form, and the Medical Report Form. You fill out the Application and Questionnaire Forms and your doctor fills out the Medical Report Form. If you are self-employed, you must take special care when filling out the forms.  Service Canada will not consider your application complete until it has received all three forms. Once it receives all three forms, Service Canada will notify you and confirm the date it deemed your application to be complete. Service Canada will then assign your application to a medical adjudicator who will review your application and decide to approve or deny the application. It can take up to four months for the medical adjudicator to inform you of his or her decision. During that time, the medical adjudicator may ask for more information from you or your doctors.

What are your chances of success? Service Canada periodically provides information on CPP disability approval rates at all stages of the claim process. The last information was from 2015/2016 as part of the auditor general's report. We have given our analysis of the CPP disability approval rates.

Appealing a denial of CPP disability

What happens if Service Canada denies your application for CPP disability? There is a good chance you made one or more of the common mistakes we see most people make. There are many reasons given for denial, but the most common are:

  • you can't do your old job, but there are other jobs you could do
  • you have symptoms and problems but they are not severe enough to disable you from all work
  • you have filed a "late application" and there is no evidence you were disabled when you last were eligible to apply
  • you have serious symptoms or disability, but it is not prolonged because you have upcoming medical appointments or treatments you have not tried yet.

If the medical adjudicator denies your initial application, you have the right to appeal his or her decision. There is a multi-step appeals process that starts with a reconsideration appeal within Service Canada and ends with a hearing before the Social Security Tribunal (SST). These levels of appeal are as follows:

  • Reconsideration appeal (Service Canada)
  • Tribunal Hearing (Social Security Tribunal – General Division)
  • Tribunal Appeal (Social Security Tribunal – Appeal Division)

Each level of appeal has its own rules and procedures you must follow. A common mistake is to lose the appeal based on a failure to meet the procedural requirements. The most common procedural mistakes are to miss the 90-day deadline to ask your appeal or to file an incomplete Notice of Appeal to the Social Security Tribunal. When you make these types of mistakes, your appeal can be denied on procedural grounds, regardless of whether you meet the age, contribution and disability requirements for disability benefits.

If the medical adjudicator denies your initial application, then you have 90 days to request a reconsideration appeal within Service Canada. You will get a reconsideration decision from Service Canada within 30 to 60 days. If the reconsideration decision is unfavorable to you, then you have 90 days to file a Notice of Appeal with the Social Security Tribunal.

Once your case is accepted for appeal with the SST, you have one year to send in all your documents and written submissions. You may request a tribunal hearing at any time, after you have sent all the necessary documents to support your claim. The SST will then assign a Judge and a hearing date for your case. At this point, the tribunal will no longer accept further documents. A common mistake is requesting a tribunal hearing before you have submitted all documents needed to prove your case. This happens when you do not understand what types of documents are needed to prove your case at a tribunal hearing. This is one of the dangers of waiting until the last minute to try and hire a disability lawyer for your tribunal hearing.

After the Social Security Tribunal schedules your hearing, you must show up on the day and time of the hearing. The Hearing is a 90-minute session where you present verbal testimony to a tribunal judge. You also make verbal arguments and submissions to the judge to say why he or she should rule in your favor. Tribunal hearings can be in person or by teleconference or video conference. It is most common for the hearings to be by teleconference and videoconference. Focusing verbal testimony on the wrong information during the hearing is a common mistake. For example, many people come prepared to speak about the here and now, rather than during the critical period which could be several years ago. After the hearing, the judge will send you a written decision within 30 to 90 days.

If you get an unfavorable decision from the tribunal judge, then you can apply to have the Social Security Tribunal (Appeal Division) review the decision. You do not have a right to have the Appeal Division review your case; rather, you only have a right to ask them to consider doing so.

If you receive an unfavorable decision from the SST Appeal Division, you can apply for leave to appeal to the Federal Court of Appeal. Again, you have no right to have the Federal Court review your case, you can only ask that they consider doing so.

After CPP disability benefits are approved

Once your CPP disability claim is approved – either by Service Canada or by order of the Social Security Tribunal – then Service Canada will process your claim and you will normally start receiving benefits in 1 to 4 months. You will receive a one-time lump-sum payment for CPP disability retroactive payment going back up to 12 months from the date Service Canada received your application. In addition to the lump-sum payment, you will get a monthly disability payment. This will be deposited to your bank account each month on the same date.

If you are also receiving long-term disability benefits, then you likely must pay over most (or all) of the lump-sum payment to your insurance company. This is because receiving the retroactive payment creates an overpayment situation with your past long-term disability benefits. Overpayment problems with CPP disability and LTD insurance benefits is often a major source of stress. If it doesn’t receive the CPP lump sum payment from you, your insurance company can stop your long-term disability payments, sue you for the back-payment amount, or both.

You may also experience income tax headaches when paying the CPP lump-sum payment over to your insurance company. This happens when your LTD benefits were non-taxable, but the CPP disability benefits are taxable. This means you will be taxed on the lump-sum payment, but not have the money to pay the taxes, as it was paid over to the insurance company. There are steps you can take to minimize your tax burden in this situation, including having the lump-sum payment taxed over two or more years, applying for the Disability Tax Credit, and claiming a tax deduction for any legal fees you paid for your application and appeals.

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