I have been on LTD for years, and recently I have applied and have been approved x CPP. In particular, very recently I
received a lump sum payment from CPP.
In this post I have specific questions about the lump sum and the repayment of it to my insurance company.
I will try to be logical and make sense, (and hopefully I will suceed). First I will present the relevant data, then I will quote what I think is relevant in my contract, then, in the last part of the post I will ask a few questions.
I received the CPP lump sum refund in the last days of March.
In particular, they paid me a lump sum of 12,335$, with an effective date of November 2016.
The curmore rent monthly amount I qualify for is 735$.
(Note that the sum I received IS LESS than 735$ multiplied by 17 months, where 17 is the number of months between the effective date and the current date)
THE RELEVANT CONTRACT PARTS:
(Note: CPP is defined elsewhere in the contract as an “Other Income Benefit”)
“Increases in Other Income Benefits
Any increase in Other Income Benefits during a period of Disability due to a cost of living adjustment will not be
considered in calculating your Disability Benefits after the first reduction is made for any Other Income Benefits. This
section does not apply to any cost of living adjustment for Disability Earnings.”
“Lump Sum Payments
Other Income Benefits or earnings paid in a lump sum will be prorated over the period for which the sum is given. If no
time is stated, the lump sum will be prorated over five years. If no specific allocation of a lump sum payment is made, then
the total payment will be an Other Income Benefit”
"Recovery of Overpayment
We have the right to recover any benefits we have overpaid. We may use any or all of the following to recover an
- request a lump sum payment of the overpaid amount;
- reduce any amounts payable under this Policy; and/or
- take any appropriate collection activity available to us.
The Minimum Benefit amount will not apply when Disability Benefits are reduced in order to recover any overpayment."
I am unclear about what prorating means? Is it just another word for spreading out?
Based on the EFFECTIVE DATE of November 2016 and PAYMENT DATE of end of March 2018, the total amount
covers 17 months.
Since, however, 17 multiplied by 735$ (which is the current monthly benefit amount ) is MORE than the paid amount of 12.335$, am I correct in assuming that the monthly amounts for 2016 were less than the monthly amounts for 2017, which are less than the amount for 2018, ie 735$?
(I assume the reason to be cost of living adjustments. The alternative explanation would be that November 2016 was only
partially paid out.)
Based on my contract, (in particular I am referring to the “Increases in other income benefits” quote above) can I make
the case that the OFFSET TO THE CURRENT AND FUTURE LTD PAYMENTS SHOULD BE THE 2016 AMOUNT as
opposed to the current payable CPP amount of 735$?
How do I find out the correct amount for 2016?
My goal is to verify if the contract allows the insurance company to claim repayment on the gross lump sum.
(I am ALREADY pursuing the fact that my insurance company should be deducting going forward only the NET CPP from my
LTD payments, instead of the gross 735$, and if that is the case, then it should follow that by default, they should not be
able to claim the gross sum)
However, based on the 3 quotes from my contract, (see above), is there any indication that they are allowed to claim the gross sum?
Any feedback is greatly appreciated.