A Reference Guide - Old Age Security and Canada Pension Plan
Canada Pension Plan
The Benefits
Disability Benefit
To qualify: To receive a CPP disability benefit, a person must have made sufficient valid contributions to the Plan and have a disability as defined in CPP legislation. He or she must be under 65 and not receiving a retirement pension. All applications must be made in writing.
To be eligible, a contributor must have a physical or mental disability that is both severe and prolonged. "Severe" means that the person's condition prevents him or her from working regularly at any job. "Prolonged" means that the condition is long-term or likely to result in death.
As of January 1, 1998, applicants must have made sufficient valid contributions to the CPP in four of the last six years. (There are also provisions that may help late applicants qualify for benefits.)
The CPP cannot pay a disability benefit to the estate of a deceased person unless an application was received before the contributor died.
Amount of benefit: The monthly disability benefit includes a fixed amount ($397.61 per month in 2006), plus an amount based on how much and for how long the contributor paid into the Plan. The maximum benefit payable in 2006 is $1,031.05.
A CPP disability benefit begins four months after the month a person is deemed to be disabled. It is payable until the beneficiary:
- regains the capacity to work on a regular basis,
- begins receiving a CPP retirement pension, or
- dies.
When the recipient of a disability benefit reaches 65, the benefit is automatically converted to a retirement pension. The monthly retirement payment will be lower than the disability payment, but most people in Canada are eligible for the Old Age Security (OAS) pension at the age of 65, which offsets the reduction. See more information about the OAS pension.
CPP disability benefits are payable to all eligible contributors who apply, whether or not they receive disability income from other sources. Other disability income programs, such as private long-term disability insurance plans, workers' compensation, and provincial/territorial social assistance programs are often designed to offset CPP benefits. This means that the monthly amount paid by these other programs is usually reduced by an amount equal to all or some of the amount paid by the CPP.
Continuing eligibility: The Department of Human Resources and Social Development is responsible for ensuring that only those who qualify for benefits continue to receive them. A person's condition may be periodically reassessed to ensure that he or she continues to be eligible.
Returning to work
While many CPP disability beneficiaries will not be able to return to regular employment because of the severity of their disability, the CPP offers a number of supports and services to make it easier for those who want to try returning to work.
Beneficiaries can continue to receive benefits while:
- volunteering;
- attending school, participating in training, or upgrading their skills; or
- working—beneficiaries can earn up to $4,200 (gross income in 2006) without having to report these earnings to the CPP. Once they have earned $4,200, they need to contact us.
Please note: this amount is not a point at which benefits are stopped; it is an opportunity to see if beneficiaries would benefit from some additional assistance that may help them return to work on a regular basis.
In consultation with the CPP, beneficiaries can also:
- plan a return to work, tailored to their needs, through the CPP's vocational rehabilitation services; or
- participate in a paid work trial for up to three months while continuing to receive CPP disability benefits. This provides an opportunity for them to test their ability to work on a regular basis and for us to determine how we can help them in their attempt to return to regular work, if that is a possibility.
Stopping and re-starting benefits
Benefits will be stopped only after a beneficiary has completed the paid work trial described above, demonstrating the ability to work on a regular basis.
Since January 31, 2005, a new provision in the Canada Pension Plan called Automatic Reinstatement provides a financial safety net for people whose benefits were stopped because they returned to regular employment. If their disability recurs within two years and they cannot continue working, their CPP disability benefits will be quickly reinstated upon request; they will not have to re-qualify.
Note: Automatic Reinstatement is available only to beneficiaries who inform the CPP when they go back to work.
There is also a fast-track re-application available for up to five years after benefits stop to people who have been contributing to the CPP.
Benefits for children of contributors with a disability
To qualify: A benefit may be paid to (or on behalf of) the child of a disability benefit recipient if that child is:
- under 18, or
- between the ages of 18 and 25 and in full-time attendance at a recognized educational institution. Benefits are suspended if the child is no longer attending school full time, but may be reinstated if he or she goes back to school full time.
Payment of benefits: For 2006, the monthly amount for a child's benefit is $200.47. Once the application is approved, payment begins either:
- the month when the disability benefit becomes payable to the contributor,
- the month following the child's birth or adoption, or
- the month after the 18- to 25-year-old dependant started attending school full time.
Payment stops if the contributor no longer receives a disability benefit, if the child no longer meets the eligibility conditions described above, or if the child dies.
Children may receive two children's benefits if both parents have made the required contributions, and if:
- both parents receive CPP disability benefits or are deceased, or
- one parent is deceased and the other receives a CPP disability benefit.
