This the text from CPP section 65(3) (3) Despite subsections (1) and (1.1), if an administrator of a disability income program who is approved by the Minister makes a payment under that program to a person for a month or any portion of a month that would not have been made if a benefit under paragraph 44(1)(b) or (h) had been paid to that person for that period and subsequently a benefit becomes payable or payment of a benefit may be made under this Act to that person for that period, the Minister may, in accordance with any terms and conditions that may be prescribed, deduct from that benefit and pay to the administrator an amount not exceeding the amount of the payment made under that program. My questions are: 1. who is an administrator of a disability income program and 2. With regard to this phrase" approved by the Minister", what are the criteria for approval or rejection?
Might I suggest that instead of getting into the weeds of the mechanics of administration of a disability assistance program, instead we turn to what I understand your genuine concern to be - the policy issue of providing less support to the more severely disabled recipients than is provided to the less severely disabled recipients?
Thanks Caro, but I think the mechanics do matter here.The questions I asked are specific: Who qualifies as an “administrator of a disability income program” under section 65(3), and what criteria (if any) does the Minister use to approve or reject these arrangements?These aren’t just technical details. If private insurers are routinely being approved as administrators of a disability income program, that directly reduces the net support a disabled contributor receives from the CPP they paid into. That has a real impact on people with severe disabilities.I paid into the CPP in good faith and expected to receive benefits upon meeting the eligibility criteria. Changing how those benefits are treated — especially without clear public explanation — doesn’t seem fair. I’d like to understand how this section is being applied in practice. For example, section 65(2) uses almost identical wording regarding payments “that would not have been made.” If this logic applies to the disability path, should contributors also expect their CPP retirement benefits to be clawed back in the same way? Sometimes the truth is buried in the weeds.
That’s the thing though, it doesn’t reduce anything, it’s purely mechanical. The reduction comes from the wording in your long term disability insurance policy. This section just facilitates everyone settling up for what they owe each other between the LTD insurer, you and the CPPD plan. Without this section, the CPPD would come straight to you, but you would be contractually obligated to send it on to your LTD insurer because your LTD insurance policy says that the amount of any CPPD you get will be deducted from your payment from your LTD insurer.
Appeciate the response.
That’s not quite accurate.Section 65(3) is not just a neutral “mechanical” process. It requires the insurer (or other party) to apply and be approved by the Minister before they can deduct CPP benefits. That approval step is significant.More importantly, CPP Disability is not welfare. It is part of the Canada Pension Plan — a contributory pension that contributors paid into over their working lives. It is available to contributors under 65 who have a severe and prolonged disability. its not a benefit it’s CPP pension.
When private insurers are approved under section 65(3) and claw back those benefits, the disabled contributor does not receive the full benefit they funded.
Even if an LTD policy says it will deduct CPP, the real question remains: Why is the government actively facilitating these clawbacks by approving private insurers as “administrators of a disability income program”? The policy is only one part of the process. i like to trace issues to the source.
If this is truly just mechanical settling-up between parties, then why doesn’t the same logic apply to CPP retirement benefits? If someone’s LTD policy says it will deduct any CPP they receive, would the insurer also be allowed to claw back CPP retirement benefits once the person turns 65? Or is this mechanism only being applied to the CPP for disabled contributors?The original purpose of section 65(3) was narrow — mainly to prevent double-dipping when employers continued paying full salary during the waiting period. It has since been expanded well beyond that and I am trying to gain a firm understanding of that process. CPP is now a subsidy for private insurance -a service already funded by premiums.
Institutions seldom abandon their original purpose all at once. They drift. Administrative efficiency becomes cost containment. Coordination becomes redirection. Over time, policies begin serving the institution’s continuity more faithfully than the people they were created to protect.
The purpose and intent of CPP was to provide an award for past service when leaving the workforce through retirement or disability. There were no strings attacked. Pay the required contributions, met the eligibity criteria and a pension shall be paid. Things have changed, but the Act did not. I ask why is administrative practice different from the legislation? Thoughts?
My main thought is that I am not able to make clear to you that the mechanics in the section that bother you are not changing your entitlements in any way. I agree that the policy setup sucks; I disagree that this section has anything to do with why it sucks.
One last stab at explaining why the section you are focusing on is irrelevant financially:
You have purchased an LTD policy that says in effect that the insurer will top up your income to $3,000 a month. If you don’t get CPPD, then they pay you $3,000 a month. If you do get CPPD, then they pay you enough to top up your income to $3,000. Let’s say your CPPD would be $1,000 a month, so the insurer pays you an extra $2,000 a month.
Now, your LTD policy also says that if you are entitled to CPPD, then your insurer can reduce the payment to you by the estimated amount of your CPPD, even though you have neither applied for it nor are you approved for nor receiving CPPD yet. That means that until you apply and get approved, your insurer can pay you only $2,000 a month. Otherwise if your insurer keeps paying you $3,000 a month when you were only entitled to $2,000 a month, your insurer somehow needs to get you to return the overpayment. That’s pretty unlikely since being disabled often makes you very poor as well.
What the section you keep mentioning does, is it allows your insurer to keep paying you the full $3,000, but if it ends up being an overpayment then your insurer can get what you owe them straight from your CPPD when it gets approved.
All of this, though, only happens because you yourself authorized it. You authorized the deduction of your CPPD from your total insurance payment when you purchased your LTD insurer policy. And you authorized the payment of your CPPD for the months the insurer was overpaying you when you applied for your CPPD. Some people don’t authorize that, and then need to pay it back to their insurer directly. And some people buy an LTD insurance policy that doesn’t contain the CPPD deduction in the first place.
So the statutory section is purely mechanical, and what you really disagree with is that an LTD policy was allowed to include that deduction in the first place.
Thank you for the detailed explanation. I do understand how the process works. Respectfully, I believe we are talking about two different things: process versus practice.It was the practice I wished to debate.I ask, do you understand the practice behind the process? As I indicated earlier, section 65(2) mirrors the wording in section 65(3) — “a payment that would not have been made.” When I become eligible to retire, will I face the same financial difficulty? Will my retirement pension claim my CPP and say it’s just mechanics?
That is the issue I have been trying to understand. If CPP is a pension, why is the Minister entering into agreements and not informing contributors?Consider this direct quote from the Auditor General’s Report 1996, at 17.127:
“Extensive negotiations took place to complete the first successful agreement with the Alberta Workers’ Compensation Board (WCB). The success of these negotiations has allowed for a much faster progress in negotiations with other provinces. The Department is currently negotiating agreements with the New Brunswick, Newfoundland, Manitoba, Nova Scotia and British Columbia WCBs. The exchange of information between the CPP and private insurers would be beneficial and could lead to additional savings. The Department is currently pursuing the possibility of a pilot project to determine the extent of possible savings.”
The practice was not part of the purpose and intent of the legislation. It originated from administrative practice focused on cost saving.If you’re interested in debating the practice, I will participate.
As a disabled person I find absolutely no value in this thread. The debate can happen until the end of the Earth comes and nothing will change so what’s the point? It’s purely a theoretical exercise and nothing more
Thanks for the response. Margaret Mead cautioned us to never underestimate the power of a small group of thoughtful, committed citizens to change the world. I echo her sentiment.
The larger issue I’m raising is the Canada Pension Plan. Our pensions are a statutory entitlement. Most people are not aware that Bill C-2 in 1997 fundamentally changed that certainty. With the addition of vaguely worded sections 65(2), 65(3), and 80, all CPP pensions (retirement, disability, survivor, and others) are now subject to administrative practice and discretionary agreements.This is not just a disability issue — it affects every contributor.
Public confidence depends upon more than efficient administration. It depends upon knowing that mandatory contributory pensions continue to serve the purposes Parliament authorized — not simply the purposes that evolving administrative practice has come to accept.
An unexamined administrative practice is not worthy of public confidence.
Contributors who have become diasabled may be among the first group to realise these changes, but that does not make it solely a disability issue.
I have concluded that your interpretation of that section is mistaken. As a result, there is no opportunity for debate.
Caro,I respect that you’ve reached a different conclusion. However, conclusions without evidence remain opinions.
I started with a simple question: how can a private insurance policy supersede federal legislation? That led me to Kenny v. Canada (Attorney General) 2004 and the reimbursement agreements enabled by Bill C-2 (sections 65(2), 65(3), and 80). Those sections introduce administrative practices that alter how the Act operates and affect all pensions. CPP is not welfare. Some of those agreements are public. Interestingly, none of them appear to grant blanket authority for ongoing deductions — they authorize one-time recovery of specific advances.
I understand this topic holds no interest for you, and that’s fine. I was simply hoping to discuss the practice, not just the process.Thank you for the exchange.
“how can a private insurance policy supersede federal legislation?”
The answer is straightforward. It cannot, and it does not. Ergo you are misunderstanding what you are reading, and I lack the communication abilities to enable you to understand why.