Do You Qualify For Canada Pension Plan Disability Benefits?
Many people who have paid into the CPP who are no longer able to work because of a disability may be entitled to receive The Canada Pension Plan disability benefit. The Canada Pension Plan disability benefit is a monthly payment to financially aid the person who paid into the CPP. Parents of children with disabilities who pay into the CPP may also qualify.
BMD Services president Barry Ho is a former CRA Tax Expert that specializes in helping Canadians claim the Disability Tax Credit (DTC) and can help them with getting started with their Canada Pension Plan Disability benefits claim process. To see if you qualify for the DTC and Canada Pension Plan disability benefits Call Barry for a Free and Private Consultation at 1-855-546-9199.
(The following information exerpted from the Government of Canada, Human Resource and Skills Development Canada, Registered Disability Savings Plan internet site, January 2012.)
What is the Canada Pension Plan disability benefit?
The Canada Pension Plan (CPP) disability benefit is a monthly payment. It is available to people who contributed recently to the Canada Pension Plan while they worked, and then became unable to work at any job on a regular basis because of a disability. The primary purpose is to replace a portion of employment earnings for people who recently paid into the CPP. There are also benefits for children if at least one parent qualifies for the CPP disability benefit.
A CPP disability benefit is not approved on the basis of which disability or disease you have, but on how the medical condition and its treatment affect your ability to work at any job on a regular basis.
What do we mean by “disability”?
The CPP definition states that a disability has to be both “severe” and “prolonged”, and must prevent you from being able to work at any job on a regular basis.
There is no common definition of “disability” in Canada. If you qualify for disability benefits from other government programs, or private insurers, this is not a guarantee that you’ll qualify for a CPP disability benefit.
We can only consider you eligible for the CPP disability benefit if our medical adjudicators decide that, based on your application and supporting documentation, your disability is both “severe” and “prolonged”. The law defines a severe disability as one which prevents you from doing your former job, or any other job, on a regular basis. A disability is prolonged, when it is likely to be long term, of indefinite duration, or is likely to result in death.
Only people who meet all the rules in the legislation can receive a benefit. The CPP disability benefit is taxable. Your benefit will stop if your condition improves to the point where you are able to work at any job on a regular basis, or you turn 65, or upon your death.
After age 65, the CPP retirement pension amount is less than the CPP disability benefit, but you are also eligible for the Old Age Security pension and possibly also the Guaranteed Income Supplement.
Am I eligible?
See if this benefit is for you. Answer yes or no to these three statements.
1. I am under 65 years of age.
2. I stopped working because of my medical condition.
3. When I was working, I paid into the CPP for at least four of the last six years.
I paid into the CPP for at least 25 years and made valid contributions to the Plan in three of the last six years.
If you answered ‘yes’ to each of the three statements, you may be able to get a CPP disability benefit. If you answered ‘no’ to one or more of the statements, it is less likely that you will qualify for a benefit, but there may be some exceptions in your case which can help you qualify.
If you are receiving a CPP retirement pension, you can apply to have your retirement pension replaced by a CPP disability benefit if you became disabled (according to CPP legislation):
- before you turned 65; and
- before your retirement pension began.
In addition, your application for CPP disability benefits must be made within 15 months of the start of your CPP retirement pension. Any CPP retirement pension payments you have already received may be deducted from your disability benefit.
Conditions of Eligibility
There are two conditions that you must meet:
- Definition of disability
- 1. The disability must be considered to be severe and prolonged as defined under CPP legislation.
- CPP contributions
- 2. You have to have made enough contributions into the CPP while you were working. (see below)
How do I contribute enough money to the CPP?
The costs of the Canada Pension Plan are covered by the contributions paid into the CPP by employees, their employers and self-employed people, and from interest earned on the investment of that money. With very few exceptions, every person in Canada over the age of 18 who earns a salary must pay into the CPP (Québec Pension Plan in Quebec). You and your employer each pay half of the contributions. If you are self-employed, you pay both portions.
To be eligible for a CPP disability benefit, you must have made enough CPP contributions in at least four of the last six years, or you must have have made valid CPP contributions for at least 25 years, including three of the last six years, prior to becoming disabled. There are additional circumstances which allow us to examine more of your working years to help you qualify.
How much do I have to contribute? If you earn more than $3,500 in a year, you pay a percentage of the money earned, up to a maximum amount ($46,300 in 2009). This qualifies you for retirement benefits. However, to qualify for a disability benefit, you have to have earned an amount higher than $4,600 in 2009 and you have to have made CPP contributions in four of the last six years, or in three of the last six years provided you have made CPP contributions for at least 25 years.
Contributions (in 2009)
|Your Income||Situation||Percentage of Your Income|
|That You Pay||That Your Employer Pays|
|Annual income below $3,500||No contributions are made if your annual income is less than $3,500||0%||0%|
|Annual income over $3,500 and less than $4,600||Contributions on income in this range will be used towards your CPP retirement, but will not help you meet the requirements for a CPP disability benefit||4.95%||4.95%|
|Annual income of $4,600 or more, up to $46,300||You and your employer pay into the CPP||4.95%||4.95%|
|You are self-employed||9.9%||0%|
|Portion of annual income above $46,300||Contributions are not made on the portion of your income above $46,300||0%||0%|
Contribution Amounts for 2009
|Type of Worker||Maximum Amount||Minimum Amount|
|As an employee you would pay||$2,118.60||$4.95|
|As self employed you would pay||$4,237.20||$9.90|
If you are not sure whether or not you have made enough contributions into the CPP, contact us and we will let you know. You can visit our Statement of Contributions online service to view and print an official copy of your most up-to-date version of your CPP SOC at any time, or you can request one be mailed to you. You can also contact us to request that one be mailed to you. It is important that you review your Statement carefully to ensure it is correct. Errors or missing information can affect your benefits.
If you have made less than the minimum contributions required, the Canada Revenue Agency (CRA) may have refunded your CPP contributions and this would have been sent to you as part of your income tax refund.
The Minimum Qualifying Period, or MQP, is the minimum number of years you need to have contributed to the CPP to be eligible for a disability benefit. The current rule is that you must have contributed in four out of the last six years. In addition, effective March 3, 2008, applicants who have made valid CPP contributions for at least 25 years can meet the contributory requirements with valid contributions in three of the last six years.
When you apply for a CPP disability benefit, Service Canada staff must determine your MQP before they can assess your medical eligibility.
Once it is confirmed that you have made the required valid contributions and have been granted a CPPdisability benefit, your previous contributions are then used to calculate your monthly benefit.
How do I apply?
The, Application for Disability Benefits is now available online. Or, contact us to have a kit mailed to you. You must apply for a disability benefit in writing. If you prefer, someone else (a family member or friend) can complete the kit for you (but please make sure that you sign the application form for your benefit).
The kit contains information and instructions, including:
- application forms related to you and your dependent children;
- a questionnaire for details of your work history and medical condition;
- a medical report to be completed by your doctor. If you have more than one doctor, choose the one who knows the most about your main medical condition;
- a consent form that Service Canada staff may need to get additional information from other parties; and,
- a Child Rearing Provision form to complete if you stopped working, or reduced the number of hours you worked while you took care of your children when they were under the age of seven. If this provision applies to you, this may help you meet the contributory requirements or increase the amount of the benefit you are eligible to receive.
Use the applications checklist to ensure the application is complete.
Applicants who are terminally ill: special procedures
Applicants who have a terminal illness will have their disability applications reviewed within 48 hours upon receipt of their application. Service Canada staff give these applications priority to determine eligibility quickly so that benefit payments can start as soon as possible. There may be other benefits available from Service Canada (survivor, children’s and death benefits) which may assist clients and their families in this situation.
How long will I have to wait for a decision?
Initial application service standard
We make eligibility decisions on at least 75 percent of applications within 120 calendar days (4 months). The time begins when we receive a complete application which includes the questionnaire, application and medical report.
Note: If additional information is needed, it may take longer to process your application or your request for reconsideration.
After you fill out your application kit and send it to Service Canada, a member of our staff will call you to explain how your application will be processed, the type of information we need from you, and answer any questions you may have. We may also gather more information from you which will help us determine whether you qualify for a disability benefit. As we process your application, our medical adjudicators may request your medical records from hospitals, doctors and other health care providers, and they may ask you to see another doctor who will evaluate your medical condition. When seeking information from outside sources, we have very little control over how quickly a response is received. These delays can add to the time it takes to process your application.
If you would like to know the status of your application while it is being processed, please feel free to contact us.
We will call you to explain how and why we made the decision on your application before we mail you a letter confirming the decision. The phone call and letter will tell you if your application has been approved and what your appeal rights are. If your application is approved, we will also tell you the date that your benefit begins and the amounts you will receive.
How much money would I and my family receive?
People receiving a CPP disability benefit in 2008 received, on average, about $799.14 each month. The benefit includes a fixed amount that everyone receives ($424.43 a month for 2009), plus an amount based on how much you contributed to theCPP during your entire working career. The most money you can receive from the disability benefit each month in 2009 is $1,105.99. Every January, there may be an increase to the CPP disability benefit to take into account any increase in the cost of living.
Under CPP legislation, your payments start four months after the date Service Canada determined you were found to be disabled under CPP rules. Your monthly payment will usually arrive in the last three banking days of each month. You can consult the exact payment dates. You may choose to have your benefit direct deposited into your bank account.
Your dependent child under 18 years of age, or your child who is between 18 and 25 and who is attending school full time, can receive $213.99 a month in 2009 if you are approved for a disability benefit. Applications for children’s benefits are included in the application kit. Your child can only receive a benefit if at least one parent is receiving a CPP disability benefit.
It is important for you to know that the CPP disability benefit is taxable. If you prefer, you may ask us to have your income tax deducted each month. The Income Tax Deduction Request form is now available online. Or, contact us to have it mailed to you.
CPP provides a benefit to all eligible contributors, even if they also receive disability income from other sources. You may be receiving disability payments from a private insurer or from a provincial social assistance program while CPP is processing your application. These other payments may be adjusted if you are approved for a CPP disability benefit. Contact your insurance company or social assistance program for details relating to your particular case.
We do not pay, or have a fund to pay, for any specific expenses such as drug costs, specific devices, etc. There are other resources which may help you.
What do I do if I don’t agree with Service Canada’s decision?
You may request a review if you disagree with our decision that you did not qualify for a disability benefit. Our phone call to you and the letter we send you will give you information on how to request a review of the decision.