Employed and self-employed Canadians must pay into the Canada Pension Plan or Quebec Pension Plan* throughout their working career. The standard age for beginning to receive your CPP retirement pension is the month after your 65th birthday. However, you can take a reduced pension as early as age 60 or begin receiving an increased pension after age 65.
But many people do not realize that if they are under age 65 and become disabled, they may be eligible for taxable monthly CPP disability benefits.
To qualify for a disability benefit under the Canada Pension Plan (CPP), a disability must be both “severe” and “prolonged”, and it must prevent you from being able to work at any job on a regular basis.
- Severe means that you have a mental or physical disability that regularly stops you from doing any type of substantially gainful work.
- Prolonged means that your disability is long-term and of indefinite duration or is likely to result in death.
Both the “severe” and “prolonged” criteria must be met simultaneously at the time of application. There is no common definition of “disability” in Canada. Even if you qualify for a disability benefit under other government programs or from private insurers, you may not necessarily qualify for a CPP disability benefit. Medical adjudicators will determine, based on your application and supporting documentation, whether your disability is both severe and prolonged.
For 2017, the average monthly CPP disability benefit for new beneficiaries is $952.51 and the maximum monthly amount is $1,313.66. If you are receiving a CPP disability benefit, your dependent children may also be eligible for a children’s benefit. In 2017, the flat monthly rate your child can receive is $241.02.
If you are aged 60 to 64 and you think you might qualify for a CPP disability benefit, you may also want to apply for a CPP retirement pension. While you cannot receive both at the same time, you may qualify to begin receiving a retirement pension while you wait for your CPP disability benefit application to be assessed, which usually takes longer.
If you are already receiving a CPP retirement pension when your application for a disability benefit is approved, Service Canada will switch your retirement pension to a disability benefit if:
- You are still under the age of 65.
- You were deemed to be disabled, as defined by the CPP legislation, before the effective date of your retirement.
- You have been receiving your CPP retirement pension for less than 15 months at the time you applied for your disability benefit; and
- You meet the minimum contributory requirements.
Should your disability benefit be approved, you must pay back the retirement pension payments you received. According to Service Canada, the retirement pension payments are normally from your first disability payments.
It takes approximately four months for a decision to be made from the date your application and all the necessary documents is received. See how disability benefit applications are assessed. A Service Canada representative will call you to explain how your application will be processed, the type of information required and answer any questions.
Medical adjudicators may also ask for additional information or ask you to see another doctor who will evaluate your medical condition. How long it takes for them to receive the requested information will impact the time it takes for your application to be processed.
If you are eligible under the terms of the Canada Pension Plan (CPP) legislation, your disability benefits will start the fourth month after the month you are determined to be disabled. You may receive up to a maximum of 12 months of retroactive payments from the date your application was received.
While on CPP disability benefits
Without having any effect on your CPP disability benefit, you can:
- Do volunteer work
- Go back to school to upgrade or complete a degree, or
- Take a re-training program.
You can earn up to a certain amount without telling Service Canada and without losing your benefits. For 2017, this amount is $5,500 (before taxes). This amount may increase in future years. If you earn more than the amount allowed, you must contact Canada Pension Plan.
Your CPP disability benefit may stop if:
- You are capable of working on a regular basis.
- You are no longer disabled.
- You turn 65 (it will automatically be changed to a CPP retirement pension)
- You die (it is important that someone notify Service Canada about your death to avoid overpayment).
What if my claim is refused?
If your claim is refused there is a reconsideration and appeal process. (See Part 2 in this series).
*This article focuses only on CPP disability benefits and does not further explore similar disability benefits available under the QPP.
|Written by Sheryl Smolkin|
|Sheryl Smolkin LLB., LLM is a retired pension lawyer and President of Sheryl Smolkin & Associates Ltd. For over a decade, she has enjoyed a successful encore career as a freelance writer specializing in retirement, employee benefits and workplace issues. Sheryl and her husband Joel are empty-nesters, residing in Toronto with their cockapoo Rufus.|