Please advise of any considerations for possibly buying a first home while on LTD and cppd. I think taking rrsps out (except under First Time Homebuyer plan) would count as income and therefore impact cppd/decrease it. Have also heard but not verified that if I lose LTD I would not be eligible for AISH due to home ownership. Appreciate any input as I am terribly anxious.
RRSP withdrawals are taxed as income, but are investments not income from work. CPPD deducts income from working/running a business, not from investments.
Definitely get a mortgage pre-approval before signing an offer on a house. I had to provide a letter from my LTD insurance company confirming that I was on LTD.
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Thanks. That is unfortunate you needed a letter… Did you struggle to get mortgage life insurance because of disability?
I never tried to get life insurance but it would depend on how you are disabled. It’s generally a better deal to get normal life insurance than mortgage insurance since the amount you receive doesn’t decline as you pay down your mortgage.
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If anyone is aware of companies who are open to insuring those on LTD, pls share
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Every company is open to that, you will need to contact them.
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You are allowed to own a home (of any value) on AISH. So that is not true, you would not lose your home. Also, typically only EARNED income counts towards the threshold and is clawed back. RRSP’s and other non-earned income (like interest or dividends etc) is not clawed back typically although some plans may differ.
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RRSP withdrawal shouldn’t affect your CPPD as it is not a working income.
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Thanks I was clearly misinformed. I wouldnt be allowed to have a tenant though, correct? That is income? If anyone could point me to resources for exploring home ownership when on private dis and cppd, that eouldy be great. It is so overwhelming I have abandoned the prospect many times
A tenant is income (taxed on rent minus expenses), but not earned income (not deducted from LTD unless you are doing it as a job like a property manager).
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Thanks everyone. I welcome any further advice or links to resources
Can you be more specific about what you are anxious about?
Also the government has a benefits finder tool, have a spin through and see if there is anything you didn’t know about. https://benefitsfinder.services.gc.ca/hm?GoCTemplateCulture=en-CA
Thanks, good link.
Well, I spoke with an accountant who said that cppd IS reduced by rrsp withdrawals and that having a tenant in home would also affect it. Everyone here says otherwise and I am inclined to seriously consider peer feedback. But contradictory info between what I read and what I am told is anxiety provoking. Service canada staff can be great but also inconsistent and at times inaccurate, so it is very hard to know who to trust. It is cognitively and physically nearly impossible to even start this process. It is likely impossible financially anyway. The prospect of verifying LTD coverage is scary as I avoid them at all costs due to the massive stress that usually results. How sad and awful that staying a renter may be more safe than risking being back on LTD radar. Ugh. Two friends were turned down for life insurance due to health conditions. I cant imagine premiums for someone high risk like me although am glad that companies do exist that will consider coverage. I guess I am venting and as I speak recognize I need an advocate
Yeah CPPD deductions aren’t in the professional expertise of an accountant so they are the wrong person to ask. You can get some reassurance from a disability lawyer from the FAQs here: CPP Disability: The Online Guide for 2022 - Resolute Legal Disability Lawyers
You could also get some reassurance by asking here: Any questions about CPP? - Financial Wisdom Forum
Or here: About DR Pensions Consulting
The guy who replies to the questions used to work administering CPP.
You rock! Thanks very much
Also don’t assume that the lender will require life insurance, mine never did (20% down payment, don’t know if that matters). House insurance was required.
I am currently looking into a selling my current home to purchase a more accessible home due to my disability. My broker informed me I needed a letter, if you are so comfortable would you mind letting me know how you ask for said letter.
Mine was prepared and sent by my claim manager at the insurance company.
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I have been at this a long time, and have worked with thousands of people at this point, so I can assure you withdrawing RRSPs will NOT reduce your monthly CPP disability payment. CPP disability doesn’t work that way. It doesn’t offer things like you see with LTD insurance. Rather, CPP disability as a program is focused on your CAPACITY TO EARN APPROX. $16,936 OR MORE (as of 2021) FROM ACTIVE EMPLOYMENT OR SELF-EMPLOYMENT from doing any type of job either part-time or full time. Once they deem you capable of earning $16,936 or more, your CPP disability just stops.
Keep in mind CPP allows anyone to earn up to $5,900 per year without any questions. So a person can earn up to $5,900 from doing anything — and still get full CPPD — as long as the person isn’t capable of earning $16,936 or more.
As far as rental income from a tenant, this is more of a grey-area. It will depend on the facts of your situation, and whether you are really acting as a property manager as indicated by others in this post. If someone just renting out a room then it would not be an issue. However, if you are acting as a property manager, or building superintendent, or otherwise doing significant work and repairs etc, then you can be deemed capable of employment.
David Brannen
Disability Lawyer with Resolute Legal
The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-917-7050 to speak with a member with our disability claim support team.
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