Hello all again. I have a question to ask and perhaps I can pick your brains for a minute. My partner had a back injury a few years ago, he is on LTD and recently asked to apply for CPPD by his insurance provider. He did and got it in Dec 2019. But of course the insurance company made him sign a form saying the retro payment goes to them directly; he did and it did. He recently got a letter though saying that LTD are claiming overpayment on the amount that CPP-D didn’t pay them for. I don’t want to post his personal details of this matter online, he’s asked me not to, but for example: Say he got CPPD $12,000 retroactive payment, which went to the insurance company directly (not him); but CPPD didn’t send LTD the correct amount and was short $1000 (they only sent $11,000 instead), can the insurance company claim overpayment for that? I thought they can only claim overpayment for CPPD payments that went directly to him, it kinda makes no sense they are asking him for more money if they were mispaid by CPPD themselves… I have never encountered this issue before, and to be honest it seems kinda suspicious to be doing this to people during such tough economic times right now. We have been trying to call the LTD provider but are having a tough time getting through (I think due to staffing issues right now with COVID-19), the line is so busy and the wait is astronomical right now.
Dave, is this even legal to do this!? Anyone can you offer suggestions of what he is to do? It doesn’t seem right
This is a common problem point of misunderstanding and occasional error. I think the insurance companies do this correctly almost all the time, but they have a difficult time convincing LTD claimants this is correct after everything the claimant has been through. If the amount of the overpayment is more than the gross amount of one month’s CPPD payment, then I think there is a problem with the insurance company’s calculation.
You should get a letter from the insurance company and you also got a letter from CPPD and it will outline the periods and amounts. Typically the LTD period and CPPD offset period DO NOT match. Sometimes Service Canada pays the Insurance Company too much and you receive a cheque from the Insurance Company (I did!) and other times Service Canada pays the Insurance Company too little and you owe the Insurance Company (more typical).
Here’s how it works.
CPPD is paid in arrears and it is always paid for the calendar month.
For example, let’s use March. It might be paid into your account on March 27, 2020, but that payment is for the “benefit period” March 1, 2020 to March 31, 2020. The exact date you receive the payment will depend on your bank.
For LTD, it is always paid in arrears, but the “benefit period” is very unlikely to match the CPPD “benefit period”. The LTD payment you receive in March 2020, say on March 4, 2020, could be for the period February 7, 2020 to March 6, 2020.
The first and last months of your CPPD backpayment will never match your LTD payments unless, by coincidence, your LTD benefit period started exactly on the 1st of a month like CPPD.
Clear as mud? Not easy to explain or understand. I had to map it out on a timeline.
The insurer can only claim overpayment for months where there was overlap between an LTD monthly payment and a CPP monthly payment. They can’t claim for more that the total retroactive entitlement – so if you were given 15 months of retroactive CPP, then the insurer could only claim repayment for up to 15 months, but only if they also paid LTD in all of those 15 months.
Errors can happen if CPP doesn’t send over the whole amount and send some to you. So using your example, if the $1000 was sent to you and LTD is claiming it, they very well may have a legal right to it if there was a miscalculation or error in CPP not sending the full $11000 to the LTD.
I am going to reach out to you confidentially. I would be able to tell what is going on if I can see both the letter you got from LTD and also the payment explanation for retroactive benefits you got form Service Canada.
David Brannen
Disability Lawyer with Resolute Legal
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Cpp-d amounts are increased every year. Let’s say you got 700 for the first year yiu we’re eligible. Next year it might go up to 720. As far as I know the insurance company cannot take that difference. So if they were paid let’s say 2years of back pay from CPPD then they actually owe you money. They can only deduct the original amount for that 1st year. So every year you get a bit more they cannot take it.
Get infor from cppd…get a letter and proof of payment to insurance. I’m sure they have no leg to stand on…
