Canada Pension Plan FAQ
What is the Canada Pension Plan (CPP) Disability Benefit and how do I qualify?
The CPP Disability Benefit is part of the Canada Pension Plan and is designed to provide financial assistance to CPP contributors who are unable to work because of a severe and prolonged disability. In addition, CPP also pays monthly benefits on behalf of the disabled contributor's dependant children.
To qualify for benefits, you must have a disabling condition which is "severe and prolonged". "Severe" means your condition prevents you from working regularly at any substantially gainful occupation and "prolonged" means your condition is long term or may result in your death.
For more information, please visit the Canada Pension Plan Web site.
I recently applied for LTD benefits. Do I have to apply for CPP disability benefits?
No, it is not necessary to apply for CPP disability benefits when you submit an LTD claim. The decision should be based on the severity of your illness or injury. Nonetheless, the terms of the LTD contract require you to apply for CPP disability benefits if OTIP requests that you submit a CPP application.
How often can OTIP request that I re-apply for CPP?
When there is evidence suggesting a member may be entitled to CPP disability benefits, OTIP will request that an application be filed. If the CPP application is denied, OTIP may request that an appeal be filed. OTIP will assist the member with their CPP appeal by sending medical information to CPP from the LTD claim file.
I have received several requests from OTIP to apply for CPP disability benefits. CPP is taxable and LTD is non-taxable! The winner in this
situation appears to be OTIP. Why should I apply for CPP?
Although the income from a CPP disability pension is taxable and reduces your non-taxable LTD benefit, there are advantages to receiving a CPP disability pension:
- It places a freeze on your financial earnings as of the date of disability. This prevents CPP from establishing a record of zero or nil earnings to average into your future retirement or disability income calculation for the period you are disabled from working and not contributing to the CPP fund. Without this earning freeze your future entitlement to CPP benefits, including retirement benefits, could be adversely affected.
- There is a federal tax credit available when a member completes and submits the Disability Tax Credit Certificate (Form T2201) with their income tax.
- If you are in receipt of CPP disability benefits at the time of your death, CPP survivor benefits will be paid at the full level as though you had been working until the date of your death.
- CPP benefits provide a cost of living allowance every year. OTIP only deducts the amount of the original CPP payment. Any COLA increases will not be deducted from long term disability benefits. So you will be gaining a little more every year if you are receiving CPP benefits.
I have been approved for CPP Disability Benefits. I signed a form authorizing CPP to reimburse my insurer directly and CPP sent a lump sum cheque to
the insurer. Why did OTIP still send me a letter to recover overpaid benefits?
CPP does not always reimburse the entire retroactive amount owed to the LTD insurer. If you have questions about CPP Disability Benefits and your LTD claim, please contact OTIP group life and disability claims or your disability service representative.
Can someone from OTIP help me apply for CPP Disability Benefits?
An OTIP disability service representative (DSR) would be happy to come to your home and help you complete the application. OTIP group life and disability claims can also help with this process by forwarding the medical information in your claim file to CPP.
If you don't see the answer to your question, please contact us.