If you have contributed to the national Canada Pension Plan (CPP) regularly over the years, it is possible to apply for benefits after suffering a severe and debilitating injury that leaves you disabled. But what if you are already receiving long-term disability benefits through your employer’s insurance plan– can your insurer legally deduct CPP-D benefits from your monthly payments?
In most cases, yes. Long-term disability (LTD) insurers typically have language in their policies stipulating that clients also apply for disability benefits through the Canada Pension Plan. LTD insurers can then reduce the benefits by the actual or estimated amount of CPP disability benefits paid.
Qualifications for CPP Benefits
The Canada Pension Program, or CPP, requires all employed citizens to contribute a predetermined portion of their income into this national plan. In addition to providing retired Canadians with a regular monthly pension, the CPP also offers disability benefits to eligible workers who are injured and become “disabled in a severe and prolonged fashion.”
There are strict criteria to qualify for CPP disability benefits. You must be:
Severe is defined by the CPP as having “a mental or physical disability that regularly stops you from doing any type of substantially gainful work.” In order to be eligible for the benefits this disability must also be deemed long-term or likely to result in death.
Are disability benefits difficult to get?
By recent estimates, up to 44 percent of applicants are approved for CPP-disability benefits on their first try. However, it is surprisingly easy to get denied, without due diligence and proper documentation.
CPP-disability pensions are awarded on the strength of your supporting documentation, so if you suffer from chronic fatigue or another condition that is challenging to prove, you need the assistance of personal injury law firm that can handle your claim strategically and provide documentation that speaks to the extent of your condition.
Deductions and what this means for you
Because the vast majority of long term disability policies allow CPP disability benefits to be deducted from the gross amount paid, injured workers are often left feeling cheated. However, it’s important to note that every policy is different in regards to how benefits are treated. It’s a good idea to review your policy carefully and ask about repayment obligations if you were to receive a large retroactive payment from CPP.
The reality is that LTD and CPP benefits rarely cover the entirety of your lost earnings. And if you are approved for CPP-D benefits after you have already been receiving LTD payments, your monthly take-home will not increase. This is because most private insurers place language in their contracts that allows them to deduct whatever monies are being paid by CPP.
As an example, let’s say you get $2,200 LTD, and you are granted $800 from CPP-D. Your disability insurer will offset their payment by $800, so your LTD benefits will be $1,400 a month, and the rest will come from the CPP.
Your insurer will increase your LTD benefit back to its original amount if your CPP benefits are stopped at any time.
Get answers and legal advice about your LTD Policy
As a trusted long term disability law firm in British Columbia, we routinely field questions from injured workers about their rights for disability insurance. If you have concerns about your CPP disability benefits, or the deductions being made under your long-term disability policy, we invite you to reach out for a free consultation.
Our legal team has the experience and skills to advocate on your behalf and work toward the best possible outcome. There are no fees unless we procure money damages on your behalf!