How does Canada Pension Plan Disability Benefits work with LTD Benefits?
Disability benefits are essential for anyone who cannot work. Are you considering applying for Pension Plan Disability Canada Benefits? Perhaps the insurance company has asked you to apply for benefits – even if they are going to get the money if you win the benefits. Or perhaps you are considering applying for CPPD benefits because you cannot work and have no access to a long term disability plan? Learn how to access CPPD benefits in this post, and others on this topic on our site. Discover your rights, obligations, and important considerations related to CPPD benefits and a plan for Long Term Disability Benefits.
What are Canada Pension Plan (CPP) disability benefits?
After an injury, it may be possible to apply for and receive disability benefits under the Canada Pension Plan, if you have made enough contributions. Your disability must be severe and prolonged to qualify. This means that you have a mental or physical disability that regularly stops you from doing any type of substantially gainful work. The disability must also be long-term and indefinite in duration or is likely to result in death.
Is my LTD insurer allowed to take my CPPD benefits?
Long-term disability (LTD) insurers usually include an agreement in its policies requiring a plan member who is receiving benefits to apply for CPP disability benefits. If the application is successful, the agreement usually gives the insurer the right to deduct the awarded CPP disability benefits from the LTD benefits payable to the plan member.
What will I be paid if my LTD insurer deducts my CPP Disability cheque?
If your plan allows for the insurer to offset the CPP disability payment, your LTD insurer will deduct 100% the monthly CPP disability benefit from their monthly payment to you. Say your LTD disability payment amount is $2000 a month, and you are awarded $1200 per month from the CPP, your insurance company will offset what they have to pay by the $1200 from CPPD. Your LTD payment will now be 800$, while the other $1200 will come from the government.
Do I need to make any payments to my insurance company from the CPP benefits?
This will depend on your specific policy. Generally, if you’ve signed the agreement, usually called a Direction to Pay form, then there is nothing you must do other than to apply for CPP disability benefits. Your insurer will most likely deduct your CPP benefit amount from your monthly insurance payment. As always, refer to the wording in your disability benefits policy.
What if I refuse to apply for CPP disability benefits because only the insurance company will benefit?
Policies can contain sub-clauses allowing the insurance company to estimate the amount of the disability benefit you could potentially win from the CPP (even if you haven’t actually applied or won!) and deduct this hypothetical amount from your actual LTD benefits payments. This means you would be getting a reduced rate without the added benefit of the CPP disability payments.
Even worse, your plan may allow the insurance company to cut your benefits off if you refuse to apply for benefits. You may be found non-compliant with the policy and left without any compensation for your disability.
What if I’m not sure if I signed one of these agreements?
Unsure of your policy terms, stipulations applicable to your LTD plan, or remain unsure what you may have to do to ensure your benefits continue? The insurance company will expect that you are familiar with your policy. If you aren’t, we can help.
Questions about a disability claim?
Jeff Mitchell is an experienced Long Term Disability Benefits Lawyer who has successfully obtain disability benefits for his clients. To book your free consultation, call 902.442.8853 or 1.800.262.8104. Prefer to email? Email Jeff at firstname.lastname@example.org.