Evaluation of the Canada Pension Plan (Disability Component) - Final Report - September 1996

1.0 Introduction

The Canada Pension Plan Disability (CPPD) evaluation, conducted by Human Resources Development Canada (HRDC), dealt with a wide range of key questions related to the achievement of the objectives of the CPPD program, and its administrative and program efficiency. The evaluation also included a requirement to provide suggestions for change, where needed, so that the Canada Pension Plan Disability program could better serve the Canadian public. This is Phase II of the CPP evaluation. A Phase I evaluation examined the CPP retirement benefit.

This Report provides the findings and conclusions of this evaluation.

2.0 Background

The CPPD program was created in 1966 as part of the broader Canada Pension Plan (CPP) which includes the retirement program and survivor benefits. CPPD was intended to provide protection against loss of earnings due to disability for eligible CPP contributors. CPPD benefits are paid to claimants whose physical or mental disability is severe and prolonged, who have made contributions to CPP for at least two of the past three years, or five of the last ten years, and who are unable to regularly pursue substantially gainful employment. As well, there is a CPP child benefit payable for the children of a disabled beneficiary.

The eligibility for CPPD was expanded significantly by legislative changes in 1986 (Bill C-116) and 1992 (Bill C-57); also, the dollar value of CPPD benefits was also increased substantially relative to the average industrial wage, after 1986. Another important program change was an administrative direction introduced in 1989, which eased eligibility criteria for those in the pre-retirement age group (ages 55-64), and was generally consistent with changes enacted in legislation for QPPD in 1984 with respect to the 60-64 years of age group. As well, the CPPD medical adjudication guidelines were revised in September of 1995 in order to insure the primacy of medical determination in the adjudication process.

CPPD benefits are funded through the broader pay-as-you-go CPP program which collects contributions from employers, employees and the self-employed. A factor that distinguishes CPPD from some other income security programs is that it is tied to work force participation (i.e. designed only for those who have worked) and that the benefits are paid out only when a person meeting the disability criteria is deemed unable to pursue substantially gainful employment.

The operation of CPPD must be considered in the context of a large number of public and private programs which provide complementary benefits for persons with disabilities, particularly Workers' Compensation Boards (WCBs), Provincial/Territorial Social Assistance, private long-term disability insurance (LTDI) and auto accident insurance.

Because of the design of the CPPD program and other programs, persons with disabilities may receive benefits from more than one provider of earnings replacement. Where multiple programs are involved, usually one program ("second payer") reduces benefits by the amount of another's ("first payer") benefits.¹ This complexity of programs means that identifying who is the appropriate "first payer" and "second payer" is an important issue, since clients, administration and program costs may be significantly affected.

The evaluation must also be considered in the context of numerous major changes which were occurring at the time of writing: a broad change in the delivery of federal income security programs, including reorganization of CPPD services (Redesign); changes in CPPD itself (such as new adjudication guidelines and a new appeals structure); and many broader changes in Canada's demography (aging population) and economy (economic re-structuring), and the Federal-Provincial quinquennial review of the CPP that is currently under way.

3.0 The Evaluation Process

The evaluation was carried out in a number of stages and through the application of a wide range of methodologies. The various components of the background research and related resources included:

a review of the literature relating to public disability insurance (PDI);
review of international PDI programs, including those of many of Canada's key trading partners;
a comparative analysis of the experiences of CPPD/QPPD, and similar programs in other countries that are Canada's major trading partners. This included an exploratory comparison of CPPD and QPPD clients using the 1991 Statistics Canada's Health and Activities Limitation Survey (HALS);
a series of interviews with CPPD stakeholders (representatives of Workers' Compensation Boards, Provincial Social Assistance Departments, private sector long-term disability insurance providers and advocacy groups);
a statistical analysis of CPPD caseloads to consider the potential role of program and economic factors in the increase in caseloads; related analysis of HRDC tax file data and CPPD master benefit computer file data;
an analysis of earnings replacement effects through CPPD;
an evaluation of the CPP National Vocational Rehabilitation Project (NVRP); and
a review of a 1995 Statistics Canada Survey of CPPD beneficiaries; and use of related research, such as the HRDC Disability Incidence Study, completed in mid-1995.

While existing data sources placed restrictions on the types of conclusions which could be drawn in an evaluation, the above research resources provided an extensive platform and multiple lines of evidence for drawing strategic conclusions about the CPPD program and its future direction to meet public concerns for efficiency and social policy.

4.0 Key Evaluation Questions and Findings

In conformance with Treasury Board standards for evaluation studies, the key evaluation questions posed relate to: (1) the rationale for the program (What are the program objectives? Is the program still relevant?); (2) program success (Has CPPD achieved its main objectives? What were the main impacts and effects of CPPD? Were there any unintended effects?); and (3) program alternatives (Are there other more cost-effective alternatives for achieving CPPD's basic objectives?) As well, the evaluation examined the underlying reasons for the dramatic increase in disability caseloads since the mid-eighties.² The Quebec Pension Plan Disability (QPPD) Program, an equivalent program to CPPD in Quebec, has not experienced a similar escalation in caseload and costs over the same period.

4.1 Rationale

Is the rationale for the CPPD program still valid, and is the Federal government's role appropriate in its administration?

The underlying rationale for the CPPD as a national federal-provincial/territorial program continues to be appropriate in that: (1) CPPD provides generally universal coverage to almost all workers, protecting those who may otherwise not be able to afford private insurance protection; (2) PDI programs are seen in the literature as an important component for sharing risks in society, and for protecting society against the particular burdens which result from individuals' uninsured disability; and (3) the program is seen by stakeholders (federal and provincial officials, private-sector LTDI providers and voluntary organizations) as representing an important part of the earnings-replacement component of the income security system, which is ideally administered by the federal government, as a national program for Canadian workers in all participating provinces.

Also, a substantial role is played by the CPPD program in the income security system, with nearly 300,000 persons with disabilities receiving a portion of their income from CPPD benefits. Data examined for this evaluation suggest that the vast majority of these persons meet the CPP eligibility criteria and have significant health and activity limitations.³ Current dollar benefits have more than tripled in the last decade, from $846 million in 1986-87, to close to $3 billion in 1995-96.

The rationale for the CPPD program is as valid in 1996 as it was when the program was first introduced in 1966.

4.2 Program Success

The issue of whether the CPPD program has achieved its objectives, and what the main impacts and effects of the program have been, were significant questions for the evaluation. These questions were examined in terms of the program's beneficiaries, eligibility criteria, earnings replacement, and comparison to other programs, including the QPPD and programs of major international trading partners.

4.2.1 CPPD Beneficiaries

Who are the CPPD beneficiaries? What has been the pattern of claims and grants? Why have CPPD applications risen? What has been the role of the economy in increasing caseloads?

Characteristics of beneficiaries: CPPD beneficiaries appear to constitute a population that is severely disabled and comprised generally of persons who are unable to undertake regularly any "substantially gainful occupation".⁴ Significantly, however, responses from the CPPD Beneficiaries Survey and other data, indicate that a number of CPPD beneficiaries believe they may have potential for vocational rehabilitation and return to work if appropriate help/training were available.

Findings from the Statistics Canada 1991 Health and Activities Limitation Survey (HALS) suggest that only a percentage of persons defined by HALS as having severe activity limitations are actually in receipt of government benefits.⁵

Increase in caseload: The number of CPPD beneficiaries has increased significantly over the duration of the program, from 27,000 when the first benefits were paid in 1970, to nearly 300,000 in 1995. The most rapid increase in CPPD applications occurred in 1991-93 so that, while about 182,000 persons with disabilities received benefits in 1990, this number rose to about 298,000 by 1995.⁶

In 1993-94, the rapid increase in CPPD caseload experienced in the early 1990s ended and in fact CPP caseloads are now decreasing. It is important to note, however, that the percentage of applications granted benefits between fiscal 1992 and 1996 was significantly lower (by 7%) than over the 1987-91 period. Other major OECD countries (US, United Kingdom, Germany) also experienced rapid increases in caseloads over the same time frame. Despite the fact that CPPD has experienced a rapid increase in disability caseload over the past few years, the CPPD caseload as a percentage of individuals ages 18 to 65 remains one of the lowest when comparisons are made to the programs of Canada's key trading partners.

Part of the increase in CPPD applications was due to increased emphasis by the provinces on referring Provincial Social Assistance clients to CPPD. These changes may themselves have been triggered by the 1987 and 1992 legislative changes in CPPD program criteria as well as by Provincial budgetary constraints. Indeed, there was a significant surge in applications to CPPD from some provinces caused in part by the increase in benefits in 1987, and a 1992 change in CPPD eligibility criteria which allowed late applications. Most important of these was Ontario, where a special operation (the "Peterborough Project") was established to process over 16,000 applicants for CPPD, whose applications were prepared by the Ontario Ministry of Community and Social Services in 1993-94. Increased referrals to CPPD from LTDs, which were similarly experiencing an increases in applications, also occurred.

The role of the economy: The economy has been identified as a significant influence on the rise in applications for CPPD. The evaluation examined whether "economic grants" are inherent to the program, or were a cause of the 1991-94 caseload increases. By economic grants is meant the award of disability pensions to mildly or moderately disabled persons for economic reasons such as increased unemployment, or as a bridge to retirement,⁷ as opposed to the award of pensions because of the inability to regularly pursue substantially gainful employment due to some health or activity limitation.

The results are unclear in spite of extensive evidence examined. For example, on the side of evidence favouring the economic grants argument, macro-economic analysis suggests a key role for the economy and economic cycles as drivers of CPPD caseloads: in time of economic recession and restructuring, applications for CPPD have increased (a phenomenon found in similar programs in other industrial countries). As well, an analysis of CPPD beneficiaries using the 1991 HALS survey indicated that nearly 10% of CPPD beneficiaries who were respondents might be capable of full time work. There is also evidence that the absolute caseload growth occurred disproportionately among those approaching the retirement age (55 to 64 years). But some countervailing evidence is also significant, for example, as regards 1991-94 trends: in that time period, the pre-retirement age group (ages 60-64), declined dramatically as a portion of new CPPD beneficiaries, even though one might expect those nearing retirement to be particularly vulnerable in the labour market. As well, data on the disability characteristics of CPPD beneficiaries in 1991 and 1995 showed no evidence that grants to more mildly disabled persons had increased.

These questions about economic grants could not be resolved with the data at hand, pointing to perhaps one of the most important findings of the study: that improved data are required for assessment of the fidelity of CPPD to its legislative mandate.

4.2.2 CPPD Eligibility Criteria

What are the criteria for granting benefits? Have CPPD applications been adjudicated consistently and equitably? What has been the role of reassessment and rehabilitation activities?

Until 1986, in order to qualify for CPPD benefits, workers had to have a disability that was severe and prolonged, had to have contributed to the plan in at least 5 out of the last 10 years, and had to be unable to regularly pursue any substantially gainful occupation. Changes to the contributory requirements have significantly changed the eligibility criteria. The most important of these is the extent to which the legislated eligibility for CPPD was expanded, effective in 1987 and 1992. In 1987, contributory eligibility criteria for CPPD were relaxed, so that an individual could be eligible for the program if contributions had been made to the CPP for as few as 2 of the last 3 years. In 1992, the legislation was further amended to allow individuals who had become disabled in the past, but who had not previously applied for CPPD benefits, to apply for CPPD benefits.⁸ These changes have undoubtedly had an impact on the CPPD caseload as significantly more persons with disabilities have applied for and been granted CPPD benefits.

Research for this evaluation comparing eligibility for CPPD to QPPD, illustrates that fewer persons, expressed as fractions of the relevant populations meeting the contributory requirements, have historically been eligible for QPPD, particularly fewer women. These differences were, however, reduced by 1993 changes to QPPD which brought the program more in line with CPPD's eligibility criteria⁹ (current data are not available to indicate the extent to which these changes have increased QPPD caseloads).

QPPD was found to apply stricter criteria and adjudication to applicants under age 60, although not to older workers (60 to 64 years of age). As well, the diagnoses which are accepted by QPPD have tended to be based on more verifiable (objective) medical criteria. For example, the QPPD (on a relative basis) has a smaller client group composed of workers with mental or emotional disabilities and repetitive strain injuries, than does the CPPD. While overall, this stricter procedure was seen as resulting in a lower QPPD caseload, the conclusion was that the lower QPPD caseload was also associated with the role of QPPD in the overall Quebec system. In Quebec, disability benefits tend to be paid by a single program (QPPD, WCB, Provincial Social Assistance). Also, there is a higher percentage of disabled persons receiving social assistance in Quebec than in the other provinces. This suggests that QPPD's lower caseload growth may in part result from more extensive use of Provincial Social Assistance.

QPPD was found to have a strong pre-retirement orientation - mainly focused towards older workers (ages 60-64). This was reflected in less strict criteria for older workers, which have been enshrined in Quebec legislation since 1984.¹⁰ The average age of the CPPD caseload has been dropping, and the average duration for drawing CPPD benefits has steadily increased. In contrast, QPPD benefits flow primarily to older beneficiaries who receive their benefits for a shorter duration of time. Overall, QPPD caseload growth was 42% over the 1983-93 period compared with 129% for CPPD.

The fact that the CPPD caseload includes many younger beneficiaries suggests that reassessment of CPPD files should be a priority to determine continued eligibility for CPPD benefits. While CPPD's recent reassessment initiatives have been impressive, CPPD has historically done very little in terms of continuous file reassessment. Therefore, for most recipients, benefits continue until retirement. The onus is on the individual to inform CPPD of any ability to return to substantially gainful employment. As well, there is no timely mechanism currently in use to systematically link the receipt of CPPD benefits to record-of-earnings files or T4 records to identify CPPD beneficiaries with any earned income.

CPPD dedicates very few resources to rehabilitation efforts¹¹ despite the decreasing average age of the CPPD beneficiary population and strong interests in rehabilitation among some beneficiaries, as reported in the 1995 CPPD Beneficiaries Survey. As well, analysis of the 1991 HALS survey suggests that close to 10% of respondents who were CPPD beneficiaries might be able to return to full-time employment. This suggests great potential for a well-targeted rehabilitation program.

Historically, the CPPD program had built-in disincentives to returning to the labour force. That is, if an individual returned to work, and became disabled again, he or she would need to re-apply for CPPD benefits. Recent changes to CPPD, which continue benefits through a three month trial return-to-work period, and allow for the "fast tracking" of reapplications for CPPD, have made it easier for beneficiaries to try returning to work, without being penalized by benefit cut-offs. But other work incentives could be provided as well. This could be done by increasing the amount of money which beneficiaries can earn without losing their benefits (to foster attempts at employment), and by fostering more timely and effective rehabilitation.

CPPD has exhibited the ability to change and improve its operations, as reflected by initiatives in reassessment, rehabilitation, and other recent changes in such areas as work incentives and adjudication guidelines. However, the results of relatively modest efforts dedicated to continuous reassessment and rehabilitation programs suggest that there is a significant potential for the containment or reduction of CPPD caseloads in the future.

CPPD has undertaken a variety of reviews of the program's administrative decision-making. For example, the 1995 CPP Random Review provided a positive assessment of consistency of administrative procedures, but no data on the role of socio-economic factors in adjudication, the severity of disability, or potential for rehabilitation of applicants or beneficiaries.¹² Similarly, file audits over the years have found little evidence of actual fraud in CPPD.

Another study concluded that there may have been a small proportion of inappropriate grants (3%), and this matter should be examined.¹³ These and similar reviews have not provided ongoing information on the functioning of adjudication processes, and the role of key factors in adjudication. Data of this sort would be required to accurately measure the existence or extent of economic grants, provide an independent view of decision-making, explicitly measure the severity of applicant disabilities, rehabilitation potential and employability, and provide quality assurance on adjudication.

For these reasons, ongoing collection and analysis of comprehensive file review information will be essential, for any definitive conclusions to be drawn regarding administrative practices.

But available evidence suggests that the CPPD program administration has been relatively constant in its adjudication of applications and claims for CPPD benefits (in spite of labouring with limited resources and an antiquated system based largely on paper files).¹⁴

However, CPPD procedures appear to have resulted in many beneficiaries who, once in receipt of benefits, continue to collect a pension, even though their disabilities may lessen, or other factors (e.g. new technology) make a return to substantially gainful employment possible. This evaluation has suggested that this group may be close to 10% of all CPPD beneficiaries. As well, the decreasing average age of the CPPD beneficiary population in recent years makes new initiatives to support rehabilitation feasible and timely. Such initiatives are likely to find support from those concerned with program costs, from beneficiaries, but also from social development advocates, who, in the course of the study identified the need for CPPD to facilitate return to work as a key priority.

Thus it appears that there is considerable potential for significantly expanded reassessment and rehabilitation efforts to ensure positive outcomes for beneficiaries, reduced program costs and more efficient delivery¹⁵. For example the potential for some beneficiaries to undergo functional assessment and rehabilitation should be considered, in order to determine whether such a person can work or not. This suggests that new program concepts and designs may be needed to enable early intervention for effective rehabilitation. This would be facilitated by new inter-program linkages for the timely identification of rehabilitation candidates, (e.g., the Employment Insurance sickness program).

4.2.3 CPPD Earnings Replacement Rate Effects

The evaluation considered the questions: What have been the earnings replacement effects of CPPD? Is there duplication of coverage from public and private sources? What offsetting practices have been used? What is the effect of the tax system on CPPD benefits?

Overall, CPPD benefits provide a significant portion of earnings for persons with disabilities. Respondents to a survey of CPPD beneficiaries revealed that 52% of their total annual income was accounted for by CPPD benefits regardless of age in 1994.¹⁶ The maximum gross and net pre-disability earnings replacement effects of CPPD benefits at the average industrial wage (the year's maximum pensionable earnings for CPP - YMPE) would have been 29% and 42% respectively, in 1995 for a single individual.¹⁷ This exceeds CPP's gross earnings replacement rate objective of 25% of the average industrial wage.¹⁸ Moreover, the earnings replacement effect would be greater for those who earned less than an average wage due to the flat rate portion of the benefit. There is no stated standard for income replacement in the legislation.

Many CPPD beneficiaries receive benefits from other government programs (e.g. Unemployment Insurance) prior to being granted CPPD benefits, with many continuing to receive benefits from other sources, including Workers' Compensation Boards, Provincial Social Assistance and private sector long-term disability insurance programs at the same time as receiving CPPD benefits. The evaluation noted multiple and duplicative sources of earnings replacement, and that the lack of a coordinated system results in a wide variation in the benefits provided to persons with the same or similar disabilities and comparable work histories, but different insurance coverage. These variations result from differences in circumstances causing disablement, differences in coverage by different programs and differences between provincial programs.

While private sector LTDI programs are designed to offset CPPD benefits by reducing the benefits they pay to beneficiaries by 100% of the total provided by CPPD, this was not the case with all Workers' Compensation Boards. Rather, the research indicated that it has been possible, in some provinces, for a beneficiary to receive both a full CPPD benefit and a full or partial WCB benefit.

In Quebec, disabled beneficiaries tend to receive their disability benefits from a single program (QPPD, WCB, the Quebec Public Auto Insurance Plan, or Provincial Social Assistance), and specifically from only one payer in that same integrated system. A person with disabilities in Quebec is thus less likely to receive public benefits from more than one source, than is a person with disabilities in any other province. As a result, the "single payer" system in Quebec seems to avoid much of the complexity that exists for CPPD because of the overlaps and administrative duplications of a "multi-payer" system.

The costs of the CPPD program have risen from about $1.7 billion in 1990 to about $2.8 billion in 1995. However, the interaction effects of CPPD and complementary federal programs such as the Spousal Allowance (SPA) and Guaranteed Income Supplement (GIS), as well as income taxes, have implications for net costs to the government sector. Estimates for 1996 suggest that $608 million of CPPD/QPPD benefits are returned to federal- provincial governments in higher tax revenues (federal: $355 million; provincial: $253 million), lower GIS and widowed SPA expenditures ($60 million) and lower costs of other programs ($19 million). On the other hand, CPPD/QPPD contributors would receive $439 million in government non-refundable tax credits in 1996. Other savings from CPPD, not measured for this study, occur for WCBs, Provincial Social Assistance and LTDIs.

While the CPPD program is an important source of income for persons with disabilities, and meets the earnings replacement objectives, the duplications and overlaps in public and private programs suggest the potential for more coordination and harmonization between CPPD and complementary programs.

4.2.4 CPPD Comparison With Other Programs in Other Countries

The evaluation considered the question: How does the CPPD program compare with similar programs of Canada's major trading partners?

CPPD was found to be similar to programs operated by Canada's international trading partners, and somewhat less generous. CPPD was compared to the national PDI programs of a number of Canada's major trading partners, including Germany, the United Kingdom, and the United States, resulting in these conclusions: while CPPD experienced a higher increase in caseloads (relative to the population 25-64 years of age) than other countries over the past decade, the current CPPD caseload was not found to be higher than current PDI caseloads in similar programs in these other countries.

As well, comparisons revealed that CPPD benefits were not more generous and, in most cases, were less generous than those of PDI programs of major trading partners. The analysis indicated that most of the countries examined have endeavoured to curb the expansion of their PDI programs in recent years suggesting that, in spite of current favourable comparisons, some adjustment of CPPD may be timely, if international comparability of CPPD is to be a priority for the future. The problems faced by CPPD were similar to those facing comparable disability programs of Canada's major trading partners, and which prompted extensive reforms of these programs.

The evaluation concludes that international competitiveness goals are served by the fact that CPPD appears, in terms of benefits and incidence rates, to be generally comparable with, but somewhat less generous than, programs of Canada's major trading partners.

4.3 Alternatives

The evaluation considered the question: Should the CPPD program be modified in any way to improve its effectiveness, administrative efficiency and attainment of its objectives?

Historically, the CPPD adjudication and appeal system has been unwieldy. At the initial adjudication stage, a high percentage of claims were denied, often because the claims were not complete. Claimants then tended to enter the appeals system which resulted in many additional approvals. This approach was very costly. In contrast, at QPPD, incomplete applications were not denied, but the claims were sent back to be fully developed. Therefore, the CPPD adjudication and appeals system has been less efficient, compared to the one which operates in Quebec. Recent changes to the CPPD adjudication/appeal system, for example to reduce the paper flow, may have changed this picture.

CPPD medical evidence is usually provided by claimants' own physicians. This may place family physicians in a difficult position in that their primary responsibility is to their patients rather than the CPPD. Quebec, in contrast, relies extensively on independent medical assessments. As well, CPPD adjudication was found to be less structured than international models, which use more exact protocols for adjudication.

CPPD recipients often draw disability benefits from a number of provincial and private-sector sources, introducing unwarranted and costly complexities to the earnings-replacement system, and in some cases, significant variations in equity between individuals. For example, in some provinces (but not all) stakeholders suggested that WCB benefits can be stacked on CPPD benefits resulting in post-disability incomes which are potentially equal to, or higher than, pre-disability incomes.

Thus, CPPD should consider undertaking to negotiate agreements with the provincial governments to create "single payer" arrangements, modelled on the system which exists in Quebec. Such arrangements might encompass all the programs which complement CPPD, e.g., Unemployment Insurance,¹⁹ private LTD insurance, WCB and PSA benefits. CPPD legislation should be modified, if necessary, to permit a greater sharing of information with public or private bodies. (The CPPD administration is already working with the Provinces-Territories to harmonize program activities, for example with agreements for more systematic information sharing).

CPPD should consider modifying its adjudication procedure and the introduction of new guidelines/tools, including: the development of baseline occupational demands, a structured scoring system to assess claimants' functional limitations to match their residual capacities to specific occupational demands, and make greater use of independent medical examiners. The new system should ensure that no initial adjudication decision is made until the claim is fully developed.

As many as 10% of all CPPD beneficiaries might be able to return to full-time employment, suggesting great potential for a well-targeted rehabilitation program. Thus, CPPD should explore approaches to enhancing its rehabilitation capability.

The evaluation of the National Vocational Rehabilitation Project (NVRP) indicates that this project was a success in demonstrating the practicality, as well as the cost-effectiveness and societal benefits of a rehabilitation function within CPPD. It supports the rationale for a permanent rehabilitation function as part of the CPPD. Significant cost-savings are possible, even with the rehabilitation of a small portion of CPPD beneficiaries. Such CPPD rehabilitation services should be provided in partnership with other service providers where feasible. Similarly, CPPD should consider significantly expanding its reassessment program to ensure the removal from the caseload of those who can once again undertake gainful employment.

As noted earlier, the need for definitive data on CPPD and its continuing operations is essential for improved program management and accountability.

The CPPD administration should consider initiating a comprehensive (ongoing) case/file review, which would resolve questions about adjudication and the extent of economic grants, and which would provide information to aid in quality assurance for administration of adjudication across regions.

CPPD should also consider other key research initiatives, including: (1) a program of joint research with QPPD, and other organizations (e.g. WCBs and others); and (2) start-up of a system of data collection for a 1999 CPPD evaluation of the many important recent CPPD program changes. The complexity of the CPPD program suggests that preparing the evaluation framework for such an evaluation should begin now in order to ensure timely results for the next five-year review of CPP.

¹ Usually, for example, some WCBs or LTDIs reduce the amount of their payments by 100% of the amount of the CPPD benefit.

² However, these increases levelled off in 1995, and were flat over the first half of 1996. See: CPPD Benefits: Caseload Growth Analysis, Income Security Programs Directorate, Planning and Strategic Studies, Forecasting and Trend Analysis, HRDC, June 1996.

³ See: Statistics Canada, Survey of CPPD Beneficiaries, 1995.

⁴ 'Beneficiaries' refer to the disabled contributors themselves, and do not include the children of suchcontrs, although eligible claimants' dependent children are also entitled to benefits.

⁵ The HALS survey analysis estimates that only 11.9% of respondents with activity limitations were actually in receipt of CPPD benefits. It should be noted that that unlike the CPPD population, many of these respondents would not have had severe activity limitations. Of those that did, many would not have met the contributory requirements of CPPD.

⁶ The pattern of CPPD claims has shown an almost steady increase in applications over the past twenty years. This increase was from an annual number of 27,966 applications in 1975-76 to a high of 109,000 in 1993-94, then a decline to 90,449 applications in 1995-96. See: Statistics Related to Income Security Programs, Income Security Programs Branch, HRDC, (unpublished statistics), March, 1996. These were the estimates at the end of June of each year.

⁷ This pre-retirement feature of CPPD was reflected as noted earlier, in an administrative direction applied in 1989-95, in which older workers were assessed on the basis of their ability to engage in their own job, rather than in any substantially gainful employment. This provision, which was similar to the QPPD policy which was set by legislation in 1984, was superseded by the introduction of more rigorous CPP adjudication guidelines in 1995.

⁸ The eligibility of such applicants had lapsed due to missing application deadlines.

⁹ QPPD eligibility requirements are now met through a 'recency of work' test identical to the CPPD's, namely two of the last three, or five of the last ten years. QPPD also confers benefits on applicants who have contributed for half their contributory period, even if they do not meet the recency of work test.

¹⁰ CPPD also evidenced a priority for pre-retirement applicants in its administrative directives in 1984-95, but this directive was eliminated as part of the September 1995 revisions to the guidelines.

¹¹ Initial results of the three year CPP National Vocational Rehabilitation Pilot Project begun in 1993 have led to its continuation though the current fiscal year.

¹² See: CPP Random Review, Disability Operations Division, HRDC, January 5, 1996.

¹³ Disability Incidence Study: Main Report, HRD Canada, 1995.

¹⁴ Most importantly, the background research for the evaluation has pointed to economic fluctuations, legislative changes and population demographics as being the primary drivers of CPPD caseloads.

¹⁵ Any such expanded effort should complement provincial activities in this area of provincial jurisdiction.

¹⁶ See: Statistics Canada, Survey of CPPD Beneficiaries, 1995.

¹⁷ This is assuming the disabled person has made the required contributions to entitle him/her to the maximum earnings replacement rate.

¹⁸ This target was proposed in the 1964 White Paper on the Canada Pension Plan, pp. 15-16.

¹⁹ This program is being renamed Employment Insurance under amended legislation.

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