I have been on LTD and the insurer asked me to apply for CPPD which I did and got approved. CPPD accidentally sent me the retro pay which I told the LTD insurer about so they are figuring out the payment I need to make to them. My case manager did mention that any yearly increases to CPPD due to inflation I get to keep. Now my question, my CPPD includes my payment and my two children who are under 18. Since my retroactive goes back to 2021 as that is the year CPPD said I should of been approved for CPPD, should the insurer use that CPPD amount for my payment and my children’s payment from the year 2021 and going forward? There was a $50 increase for our combined CPPD increase from 2021 to 2022. If anybody can shed some light before my LTD provider provides me with the amount to pay back that would be much appreciated and I hope David get a chance to see this post as well.
Check your LTD policy, most of them don’t deduct the children’s amount at all, just your primary amount. Yes the monthly deduction would be fixed at the monthly amount for the year you became disabled.
Depending on how much other income you made last year, you may want to have the part of the CPPD payment taxed in 2021 instead of all in 2022. But if you were still working part of last year it may be better to claim it all on the 2022 tax return. I’m not sure what they do automatically and what you need to request.
Just checked what the January inflation increase was, my 2022 payment is 1.0269962105 times my 2021 payment.
If you know your 2022 monthly payment then multiply by 0.9737134274 to get the 2021 number.
My policy doesn’t directly offset the children benefits but I do have an all sources maximum clause so once a hit a limit then they can basically take all of the 2 children benefits minus $25 I keep which is ridiculous. Thanks for confirming they should only take the CPPD amount for when my CPPD started in 2021. Service Canada sent me a breakdown of how much the monthly benefit was in 2021 and what is now in 2022 and it did increase exactly by the number you provided, 1.0269962105. I did send the breakdown to the LTD provider. I hope the LTD provider does the right thing and use the 2021 amounts going forward and hopefully the government increases the inflation rates much more for 2023.
I don’t believe that the children’s benefit is your income, so I don’t think it will count against the all source maximum for you. I believe it’s the kids’ and you just receive it on their behalf because they’re kids.
Edit: the gov website suggests that it’s the child’s benefit. See https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-childrens-benefit.html
“The benefit is paid on behalf of the child to the disabled contributor, if they have any custody and control of the child. If the disabled contributor has no custody and control of the child, the person or agency having custody and control may receive the disabled contributor’s child benefit on behalf of the child.”
This is what my policy says, ‘ If necessary, the amount of your benefit will be further reduced so that your total income from all sources does not exceed 85% of your pre-disability gross earnings (net earnings, if your benefit is non-taxable). All sources include those sources stated above and any benefit you are entitled to receive from:
- Canada or Quebec Pension Plans’ dependent benefits
Well that sucks. Although if you’re getting to 85% you’re doing well!