Cppd and offsets from investment income


#1

Hi,

I have been on LTD (100% employee paid) since October 2016. I suspect that GWL will ask that I apply for CPPD in the very near future. If I do apply for CPPD I expect that I will be approved as I have cancer (operated) with numerous side effects such as limited neck, arm and chest movement, numbness and tightness in my neck, head and arm area, chronic fatigue due to medication (gabapentin), sleep apnea and from radiation therapy.

I want to cash in some equity investments that I made in the stock market but I am worried if I do then either my LTD will call this income (profit from my investments) and offset my LTD benefit and/or CPPD will call this income and offset my CPPD.

My LTD indicates that any “self employed” income must be declared for offset purposes. I don’t believe that equity income falls into the category of “self employed” income but if CPPD is reduced by this income then GWL will reduce my LTD with the maximum amount of CPPD not the reduced amount.

As you can see it isn’t worth it to be approved for CPPD at this time. However, if I don’t apply when asked to do so then GWL will simply reduce my LTD to the CPPD amount. Any advice on this dilemma?

Steve


#2

Any investment income is yours 100%. There is no offset from GWL or CPP-D. :slight_smile:


#3

When you are approved for CPP-D you will end up having taxes to pay. So don’t ask to apply -wait until they push you too. In order to apply for CPP-D there are time limits so review that and try to hold off until you have too.


#4

I have the opposite opinion, I say apply early and have less back taxes to pay.
I guess overall you might have less taxes overall to pay by waiting.


#5

Thanks for the replies. Much appreciated.

Allyoops, I am reviewing the CRA website and I can’t find where investment income isn’t specifically stated that it isn’t an offset for CPPD. It does state that self-employment income will be used as an offset but I am not sure if stock market income is considered self-employment income or not. How do you know investment income isn’t an offset for GWL? Again, it does state in my contract that any monies received from self-employed income will be used as an offset. I guess my question then is what is considered self-employed income? This is my question to CRA.

Steve


#6

Selling investments is not self employed income that will offset LTD or CPP-D. Unless you run a business as a day trader and have registered as such–it is not employment income,

Even though investing is putting your money to work–you are not earning an income from employment.

According to the Canada Revenue Agency , you may have self - employment income from a business, profession, commissions, farming or fishing.


#7

Thanks Allyoops. Just trying to ensure that any income I make on my investments to supplement my finances isn’t taken away by CPPD or LTD.

Steve


#8

Investment income will not affect your LTD and CPPD. You need to actually work for it to count.


#9

Great to know Elaine, and thanks for your reply. Do you know this from experience or can you point me to where the definition of “self employed earnings” is located. I am nervous at cashing in some investments if GWL or CPPD uses it as an offset. Just trying to ensure that my finances are in order before cashing in these investments.

Steve


#10

It is not considered employment or self-employment income, and won’t be used as offset to your benefits. :slightly_smiling_face:


#11

#12

Thanks Nip. This is all starting to be much clearer for me now. I now understand what self employed income is and how it effects my (potential) CPPD benefits. Seeing how GWL seems to have the same definition as CPPD for self employment income, then, I think that it would be safe to conclude that my LTD benefits won’t be reduced by any capital gains that I want to cash in from my investment account.

Steve


#13

I am not telling anyone about my investment income. My lips are sealed with glue.


#14

I am on LTD and also CPP-D. I will be retiring in 2020 at age 59. At that point I will be receiving a government pension and also continue with CPP-D until the age of 65 when it will automatically turn into my CPP pension.

My question is that I will also be receiving a severance pay at the time of my retirement. Will that have an effect on my CPP-D?


#15

Good news-No it will not


#16

I have interest on my investments and aslo I sold and cashed all my stocks while on LTD.

But if you are concerned, before you sell your stocks you should call your case manager and ask if investment income will count against LTD payments.