here is a petition if anyone is interesting in signing.
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They called CPP a pension. We believed that. We contributed because we thought those contributions built a pension benefit we had earned.
In 1997, small sections were added to the CPP Act. They did not look like a big change. The wording was broad, not plain. Contributions still had to be paid. Eligibility still looked the same.
Most people thought their pension was protected.
Those small sections made a big difference.
After you qualify, the Minister can approve arrangements that redirect the payment.
What used to go to the contributor can now be coordinated with private plans. Insurers and target-benefit schemes can deduct the value of CPP and pay less themselves.
The Act does not tell contributors that mandatory contributions can be used to benefit the private sector.
That is why I created this petition.
I am asking Parliament to decide whether those Minister-approved arrangements still match the original purpose of the Canada Pension Plan.
Please read, sign and share e-7751:
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It’s our pension. Why shouldn’t we ask for oversight?
We had to pay into CPP. Our contributions earned us a public pension.
In 1997, Bill C-2 discontinued the Advisory Board, created the Investment Board, and introduced reimbursement provisions for provinces, municipalities and private insurers.
We still pay in. But if our pension reduces another payer’s obligation, who gets the financial benefit?
Becoming eligible should not be the moment we discover that coordination is in play.
Petition e-7751 asks Parliament to review those changes and the practices that followed: is our pension still serving the purpose we paid into it for?
That is a fair request. If you had to pay in, you deserve an answer.
I fully support your policy position that CPPD should be protected from deduction by LTD insurers, or in my opinion, at the least be limited to a deduction net of tax.
Unfortunately, the source of the deduction that you are rightly complaining of is not the statute that you identify. The source of the deduction was contract law, as agreed to by the private parties to the LTD insurance contract. I would urge you to pivot away from the focus on this irrelevant statute and to focus on the policy issue instead.
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Thanks Caro — I agree the outcome is unfair, and contributors should be told when an insurer is approved by the Minister.The monthly reduction comes from the LTD policy’s offset clause. I am not disputing that.
CPP Subsection 65(3), added by Bill C-2, enabled insurers to apply and be approved by agreement with the Minister. The section says that despite subsections 65(1) and 65(1.1), if an administrator of a disability income program who is approved by the Minister has made a payment that would not have been made had CPPD been in pay, the Minister may deduct from the benefit and pay that administrator, up to that amount. C-2 shifted the CPP toward coordination by using the words “a payment that would not have been made” if the CPP benefit had been in pay. It reads as a needs-based reimbursement, not as authority for CPP to be used as a deduction against other sources. The same words appear in 65(2), which covers all pensions. It concerns me, as does the lack of transparency.
The shift that happened in 1997 is real, the petition asks for a review to see the 1997 changes align with original purpose and intent of CPP.
Yeah I read that section to say you the institution that might not be supposed to pay the insured can keep paying the insured payments the insured isn’t entitled to because the institution that was supposed to pay will reimburse the institution for what they didn’t owe the insured. I don’t read it as giving permission to deduct things they would actually owe to the insured, it just helps the insured stay alive while it’s all being processed.
Thanks Caro, the wait-period reading is right. The deduction is not.
“The purpose of the Canada Pension Plan is to make reasonable minimum levels of income available at normal retirement ages, and to people who become disabled, and to the dependents of people who die. There will be scope for the continuation and extension of private pension plans to provide benefits over these minimum levels.” Canada, Department of National Health and Welfare, The Canada Pension Plan (August 1964), “Main Features of the Pensions.”
Over means over, not reduced by. No assignment, no integration formula, no 70 per cent target. The disability minimum was paid in full.
Bill C-2 added the reimbursement pipe. It did not require an offset. CLHIA, The Role of Disability Income Insurance Plans (May 2003), calls CPP the foundation, then subtracts it. Page 23 says a recipient “is offered the choice of entering into an assignment of benefits agreement.” I never signed one. The monthly cut is the policy. The petition asks whether that practice still honours the purpose.
There is no harm in asking Parliament to look. Oversight is what a contributory promise is owed when the practice has left the purpose.
And, yet, there are exceptions to the clawback
@David_Brannen could you comment on the possible exceptions?
The 1964 White Paper said what CPP pension was for. It was not for an insurer.
The purpose of the Canada Pension Plan is to make reasonable minimum levels of income available at normal retirement ages, and to people who become disabled, and to the dependents of people who die. Private plans could continue and extend benefits over those minimums. Over. Not reduced. The minimum stays. The private plan is the amount above it.The disability pension was made more generous than the retirement pension on purpose, because of the special needs of disabled people. The flat rate was that extra. It was not described as wage replacement to be handed to an insurer.
Alberta’s workers’ compensation board used to take CPP disability off an earnings-loss supplement. On 1 June 1996 it stopped. Policy 04-04 says the Board may deduct the full CPP disability entitlement for the same injury. Then it says the Board does not deduct CPP benefits for periods on or after 1 June 1996. Before that date, the supplement is reduced. After it, the disability pension stays with the worker.Five months earlier, an insurer wrote the opposite rule and left it there. The disability benefit is directly reduced by the CPP disability pension. The public plan looked at the same deduction and turned it off. The private plan kept it, priced the premium as if the pension were already taken, and called the result coordination. That is not a benefit over the minimum. That is the minimum used to shrink the private cheque. But they forgot to tell the plan members.
That is institutional drift. A floor, set higher because the need was greater, hardens into a term that pays the plan’s own obligation. The contributor, who paid in, is told the pension was never theirs to stack. Nobody votes on the drift. It is just still there.
Drift can be reversed. Alberta reversed this one. A date, and the supplement was no longer shrunk by the disability pension. The pension did not change. What changed was the decision to use it. The word in the design was over. The practice took under.If a public wage-loss plan can stop taking it, an insurer can be asked why it did not. The date is 1 June 1996. The policy is 04-04. The deduction is a choice. Choices get unmade.
Petition e-7751 is the other end of the same issue. It asks the House of Commons to review the 1997 changes that let administrative agreements treat a CPP payment as one that “would not have been made,” and to use that payment to reduce a third party’s obligation. It asks Parliament to restore any protection it finds has been diminished. Open for signature until 14 January 2027.
I really don’t understand why you’re wasting a lot of time on this.
The LTD contract is a voluntary agreement that you sign when you undertake it and you agree to the CPP disability claw back before the contract is an enforceable agreement.
You are more than welcome to forgo your LTD payments in order to not get CPP disability clawback.
It’s as simple as that and I still can’t believe that many months later this topic is still being rambled upon because it really is a waste of the collective communities’ time.
What I truly don’t understand is if you really want to die on this hill go and retain a lawyer and go fight it. Otherwise it’s just keyboard bashing.
As someone on LTD and cppd… I don’t get why this is such a big deal. Sure they clawed back some of it as they are contractually allowed to do so but the upside of that is CPP disability payments until I’m 65. Woe is not me or anyone in my situation.
Sorry.
Anonymous1, thank you for the response. Knowledge is not advanced without the ability to question. I will offer my perspective on my motivation.
It isn’t wasted time if the term was never in the document you were given. The contract is part of it. It is not the whole of it.
The 1964 White Paper said what the pension was for. The purpose of the Canada Pension Plan is to make reasonable minimum levels of income available at normal retirement ages, and to people who become disabled, and to the dependents of people who die. Private plans could continue and extend benefits over those minimums. Over. Not reduced. The minimum stays. The private plan is the amount above it.
The disability pension was made more generous than the retirement pension on purpose, because of the special needs of disabled people. The flat rate was that extra. It was not described as wage replacement to be handed to an insurer.
Two systems, funded separately, for specific purposes. Then they join as one. In my case, without notice. The long-term plan was wage replacement insurance. The insured peril is wages. I expected employment wages to be deducted. I did not expect disability benefits to be deducted as if it were wages too.
The LTD came with the job. The agreement named the plan and did not name a CPP deduction. The handbook said a percentage of earnings. The clawback was in a policy I was not given. You cannot agree, before the contract is enforceable, to a sentence produced later.
I have finally seen the undisclsed policy. CPP pensions are placed in the 85 percent maximum. They stack on top of the 70 percent. But if that CPP pension is produced through the disability route, it is deducted dollar for dollar. Why are CPP pensions from contributors who become disabled treated differently? This creates a two-tier system, and I believe it is worth examining.
I counted on my CPP to fund accommodations. I have a traumatic brain injury and significant limitations. Wage replacement insurance does not provide accommodations. My struggle is for survival.
Alberta’s WCB stopped the same deduction on 1 June 1996. Policy 04-04. A public wage-loss plan unmade the choice.
I am not saying coordination can never happen. What I am asking for is transparency. CPP was created as a pension. Contributions are mandatory. They were protected. Then came the shift. Target-benefit plans may coordinate to stay sustainable, but when that happens the protections are eroded. People need to be informed.
A lawyer is the right step for a file. Describing the term is how the next person becomes aware and has understanding. According to Margaret Mead, “Never underestimate the power of a small group of people to effect change.”
Petition e-7751 asks Parliament to look at the 1997 changes that let a CPP payment reduce a third party’s obligation. Open until 14 January 2027.
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