How do CPP-D benefits impact LTD claimants?
By AdvocateDaily.com Staff
For individuals who are unable to work due to a disability, there are several reasons to apply for Canada Pension Plan-Disability (CPP-D) benefits, even if it may impact the benefit they receive from a private insurer, says Oakville personal injury lawyer Jill Edwards.
CPP-Disability (CPP-D) is available to anyone who has contributed to CPP over their working career but is no longer able to work, while long-term disability insurance, available through many employers, is a little easier to qualify for, says Edwards, partner with Edwards Pollard LLP.
However, anyone who qualifies for both CPP-D and LTD will have their LTD benefit reduced by the amount of their CPP-D benefit, she tells AdvocateDaily.com.
It’s still important to apply, she says. If they don't,” the insurance provider may try to deduct the CPP amounts anyway even if they aren’t receiving CPP-D benefits.
Additionally, if the LTD insurer cuts off the recipient — due to collecting surveillance or differing medical opinions — the CPP-D payment wouldn’t necessarily stop.
“If you are approved, it’s a really good safety net,” she says. “LTD is less likely to terminate if CPP is approved,” she adds. “It’s a tougher test.”
If a person was approved for CPP-D and denied LTD, they are often “solid cases,” Edwards says. “But insurance companies might still deny.”
The third reason to apply for CPP-D is, if the individual is approved, they can then apply for the disability tax credit, which is helpful, she says.
Another important consideration for someone receiving LTD, who then applies for CPP-D and is approved, is that CPP-D determines the date of disability, Edward says. This means the individual could receive a retroactive, lump sum.
“We always tell the client in advance not to spend it, because this is actually a credit to the LTD insurer,” she says, adding it’s something that would be spelled out in the policy.
“That’s one of the hardest things for a client to get their heads around — when they are approved they then have to hand over the large cheque,” she says.
People suffering from such prolonged disabilities tend to be those who have either been in an accident, developed a disease such as Parkinson’s or Multiple Sclerosis, or have experienced psychological trauma or mental health issues.
Often, clients reach out to a lawyer at the point of their benefits being denied.
If that is the case, Edwards says she will look at what the medical practitioners indicated about how long the person would be off work.
“If there is a good chance that the person will meet both the LTD and CPP-D tests, we can help them make the application for CPP-D and also step in and assist with the denial of the LTD claim,” she says.
“The cases, such as those involving chronic pain and psychological disability, are always the most challenging. You need the support of the medical team behind the disabled person. That will really carry the day in terms of whether they can or can’t work,” Edwards adds.