I was recently approved for CPP-D and will be receiving my first payment next week. (I’ve yet to receive any paperwork from CRA but know I have been approved.) Since applying in September, one of my children turned 18. I have the ISP-1152 paper application form and proof to submit that they are a FT student (still in HS) but before I send it, does the payment have to go to a bank account that’s only in their name? Should I open up a joint account so I can access the money? I realize that the payment now goes to them but my (horrible) LTD case manager said that the insurance company has the right to claw back all of the children’s benefits too so I don’t want my child to blow the money in case they make me pay it back. Can I just put my banking information on the ISP-1152 form?
Thank you in advance to anyone who can give me the answer. I just don’t want to put my banking info on the form if it will cause a delay.
The insurance company can usually claw back child benefit if written in your policy if they are under 18. Over 18 they can’t touch it. That is what my big 3 insurer told me.
I will just keep the money separate for the time being, in case they come after it. I spoke with MSC today and they said that the insurer only requested a clawback of my CPP-D, not the children’s benefits. I won’t be surprised if they come for the younger child’s (under 18) benefit too.
It’s rare (well from my perspective) to find a policy that allows the insurer to claw back the child portion of CPP-D. The cpp-d rep who called to say I was approved even told me to be careful as some insurance reps lie about this.
Definitely get your insurer to show you in writing where your LTD policy/contract gives them the right to claw this portion back.
No. The CPP contributor is the one on disability. The amount paid for the CPPD is based on the contributions of the CPP contributor plus a small stipend for each underage child.
I’d get a copy of your LTD contract to verify. At the very least have the LTD insurer share the exact wording of the LTD contract that allows them to do this. You are the first person I’ve ever heard that had their child portion clawed back. When I was approved for CPP-D the Service Canada rep said LTD insurers aren’t entitled to the child portion.
That can happen depending on the individual contract details.
The one situation where some contracts will claw back child benefits is where you hit an all source maximum benefit, often at 85% of your pre disability income. This doesn’t happen often, but can happen when you have multiple sources of disability related income. The purpose of this maximum and clawback is to ensure people are not incentivized to claim disability benefits greater than they lost due to disability.
The policy needs to explicitly state CPP-D child portion is offset able for it to be deducted from your LTD payment.
Also, the CPP-D child portion is legally (according to both Service Canada and Canada Revenue Agency) is the child’s income and can’t be used in the “all source income calculations” unless that clause actually states CPP-D child payments will be attributed to the parent income calculation.