Well here we are approximately two months since my last blog. The dog days of summer are upon us.
I have had a very busy summer and have talked to many interesting people across the country about Canada Pension Plan disability and the problems they are facing - thank you very much for your good feedback about the website.
I chose to write this blog because on a daily basis I receive phone calls from individuals who have been denied CPP disability benefits because they have been in receipt of CPP early retirement benefits that they have taken after age 60.
Now, CPP disability will provide you a benefit until age 65 - after that your benefits would change over to retirement benefits. This is typical with most disability insurance policies as retirement age is usually 65. (I know there has been debate about this age - but for insurance purposes 65 is the magic retirement number.)
If you chose to take your CPP early retirement benefits before age 65 there is a pretty negative implication pertaining to your CPP Disability benefit.
Okay here is it - the legislation states that you are only able to receive one type of CPP benefit at a time - these are death, retirement, and disability. The legislation also states that CPP can only pay 15 months of retroactivity from the date of your CPP application. If you have been in receipt of your early retirement benefits longer than 15 months from the date you applied for disability benefits - then you be inelligible to change your benefit from early retirement to disability.
Some examples - Dave applied for early retirement benefits at age 60, and at age 63 he had a stroke disabling him from working. He would be inelligible to for CPP disability as he had been on early retirement for longer than 15 months.
Susan was disabled from working at age 61. She applies for CPP Disability benefits at the same time she applies for CPP early retirement benefits. If she is found disabled according to the legislative criteria - any disability benefits she received would be reduced by any early retirement benefits she had taken.
Lisa is disabled and applies for CPP disability - the feds send her a letter denying her claim - saying she is not disabled but lookey here - you can apply for your early retirement benefits instead - and here is a form for you to sign saying that you want to withdraw your disability claim and take your early retirement benefits. Okay, early retirement benefits are less than you would receive for a disability benefit - so get some advice before you sign that form.
Gus applies for CPP early retirement at age 60 and states that he stopped working due to disability. He assumes the Feds will put him on the "correct" pension based on their review of the application. Two years pass and Gus realizes he is not getting a disability pension. He contacts CPP and is advised that he never applied for CPP disability even though he states he stopped work due to disability - you have to fill out a CPP disability application in order to apply for the benefit.
Bill applies for CPP early retirement and when he becomes disabled is told he cannot qualify for CPP disability based on the fact he has been on early retirement longer than 15 months - he is upset because CPP never advised him of the consequences of applying for early retirement benefit - sorry Bill - transparency is not the Feds greatest attribute.
So here are my final thoughts - statistically the incidence of disability increases as you age. If you want disability coverage under the your Canada Pension Plan then you do not apply for CPP early retirement benefits. If you are disabled by age 60, then you can if you choose to, apply for both the early retirement and the disability at the same time - and have someone review your file if you get the letter asking you to withdraw your CPP disability application and take early retirement benefits.