To some degree, but my understanding is the insurance companies lobbied the government to enable the clawback of CPP. It can mean the difference between keeping a house or being forced to move because you can no longer afford your mortgage payments. That is emotional, imo
I’m not entirely sure that’s accurate because there are a number of clawback provisions that have nothing to do with CPP. The list is actually quite large although most of it doesn’t apply to the vast majority of plan members.
I mean put it to you this way. A lot of long-term disability plans aren’t even indexed for inflation. But again claimants now agreed to that when they signed up for the policy…
Personally I’m not concerned about the cppd clawback. I actually think about people who applied and got denied versus The claw back which sucks but that also means guaranteed income until 65 which is a big deal and also a huge helpful driver for LTD claims
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The contract must inform- that is the issue.
It does. If there’s no provision for cppd claw back then we’re talking about something else. If they’re doing so without it being in the contract then it’s considered breach of contract which is then grounds for you to sue them but I highly doubt it’s not in the contract
The problem is most people don’t understand basic contract law
It’s not in the contract. I have had to dig deep . Are you aware of the undisclosed agreements which form the foundation of the CPP/LTD issue? This is one example. Open By Default – Employment and Social Development Canada – A-2024-03066
There is an interesting discussion related to CPP & LTD in the following paper:
This was from the same time period of insurers lobbying. I would be interested in talking with you- typing is still an issue for me.
You have a copy of your Master LTD contact and doesn’t allow for offsets of government sponsored plans?
If that is the case, and they are still offsetting your CPP-D there will be dozens of lawyers who would absolutely love to take in your case.
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Thank you. Legal assistance will be my next step.I was never properly notified about how CPP-D interacts with private long-term disability (LTD) benefits. Like many others, I contributed to the CPP my entire working life expecting it to be my earned pension — accessible either through retirement or disability under the same federal statute (Canada Pension Plan Act).This “common practice” creates terrible optics: a public pension funded by mandatory contributions from workers and employers is being used to offset private insurance liabilities. Disabled contributors are treated differently from retirees accessing the exact same CPP.
Two core questions many disabled contributors are now asking:
1. Can a workplace Collective Agreement override federal legislation?
CPP is governed by federal statute (Canada Pension Plan Act). A collective agreement cannot override or change the CPP itself. However, most group LTD policies (often negotiated through collective agreements) include offset clauses that reduce the insurer’s payout by the amount of CPP-D you receive. The collective agreement doesn’t change the law — it simply incorporates the insurer’s contractual terms.
2. Why are insurers (and other approved organizations) accessing CPP-D at all — and why wasn’t this disclosed?
From my research, the issue runs much deeper. It rests with formal agreements that organizations apply for and that are not routinely disclosed to contributors. The mechanism is in the ISP-1618C form from Service Canada. Google it — click the insurer dropdown and you’ll see a long list of approved entities (including many major carriers as well as other organizations) that have formal “Approval Deduction and Payment Agreements” with the Minister. These agreements allow Service Canada to pay your retroactive CPP-D lump sum directly to the approved organization. These entities already collect monthly premiums (in the case of insurers). Yet once you qualify for CPP-D, they use these agreements to reduce or claw back what they pay you. The root issue isn’t just the language in the collective agreement — it’s these agreements that effectively treat your earned contributory pension as a subsidy.
We need to be curious and question the narrative.
If your complaint is that you weren’t notified about the CPP-D offset, then that is a totally different scenario and no lawyer will take on that case unless you pay them by the hour (if at all). My comments on your two points:
- That is not what is occuring. You willing signed up for an inexpensive LTD policy that said you would give your cpp-d to the insurer if you are eligible to receive CPP-D. It’s private legally binding agreement and has nothing to do with federal legislation.
- At anytime you could of reviewed your LTD policy contract to see it’s details, and read that your CPP-D is offset against your LTD payments. You could have also upgraded your LTD policy to prevent the CPP-D offset. Not reading or understanding clauses in any type of insurance policy (LTD, home, auto, etc) is a failing of the insured not the insurer or government. For the life of me I don’t understand why people get insurance but never actually get a copy and read their contracts.
I asked for a copy for years- was denied. I am well aware of fine print. I do read it but can’t read it not disclosed. Obviously my case will need legal eyes. It is the grey area between federal legislation and provinicial implimentation. Thanks for your response.
You asked for years for a copy of your LTD policy contract for years while working and your employer and insurance company said no?
There’s no gray area in CPP-D offsets against LTD. It’s pretty black and white under the common law.
Yes, I repeatedly asked my employer and the insurer for a full copy of my LTD policy while still working and was denied each time. I understand offsets can be common contractual practice in LTD policies. However, they are not “black and white under the common law.” They are contractual.
Neither offset policy or Approval, Deduction and Payment Agreement that insurers enter into with the Minister under subsection 65(3) of the Canada Pension Plan Act were disclosed to me.
Section 65(3) is narrowly worded around recovering amounts the administrator “would not have paid” if CPP-D had already been in pay. The term “administrator of a disability income program” is undefined in the Act, with no statutory approval criteria — which is exactly why this feels like a loophole to many of us. The undisclosed agreement — which sits outside both the collective agreement and the LTD policy itself — is what completely blindsided me. CPP-D treated like it is a like policy of insurance instead of a pension.
This is why my situation needs legal review and people need to question.
Thanks for the discussion.
Even if I take everything at face value which is a stretch admittedly and I mean so respectfully, you will have to pay hourly for a lawyer because if you’re asking for the contract to be set aside as you deem it not to be enforceable then you have a significant Hill to climb and you will lose. This is contract law 101.
But if I were the insurer I would use your argument against you because then they can get out of the contractual obligation to pay you… Be careful what you wish for
What made you ask for the LTD master contract prior to the onset of your disability? You are the first person I’ve come across (other than myself) who has asked to see it prior to disability. Sounds like your employer has some risk in a bad faith claim. Has it been less than two years since you last asked for it?
Contracts are governed by the common law for parties that go into dispute. The cppd offset clauses in every single LTD master contract I’ve ever read is black and white and legally binding under the common law with no gray area.
You mention 65(3) and IS-1618c which are just legal mechanisms to collect eligible cpp offsets directly from the govement instead of from you directly. What gives the insurance company the legal ability to offset your CPP-D (including retro amounts) is 100% the LTD contract and nothing else.
Sorry if I sound adversarial, but this is just a fraction of a fraction of a fraction of what you will have to face if try engage legal support.
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I enjoy discussion and debate. I didn’t ask prior to, I was an administrator in a position " to know" -it was concealed. It took 6 years of reasearch to find the Agreements, then I focused on the withheld policy. I then laid all the pieces.
If interested, I could logically walk you through the process. One question that I have, if I may. Why do you say the pracrice is at common law, do you know or were you told?
The question about insurer access has been questioned by me as well- they refuse to answer that as well. There is no privity of contract or statutory authority. I am trying to illuminate the shadows.
With 25+ years of experience in contract management and extensive history as an expert witness in litigated contract disputes, I am well-acquainted with the principles of this field. It is a fundamental tenet of our legal system that contracts are governed by common law. Ask any lawyer.
That’s a very odd situation that it took 6 years to find an LTD contract. I know some people have some difficulties getting it, but everyone I’ve helped has gotten a copy of their master contract within 6 weeks.
The fact that you never asked for your LTD policy contract prior to being disabled kind of throws your “wasn’t given the details” claim out the window. To show damages you need to prove that you asked for the master contract prior to being disabled. You would also need to prove that you would have engaged in purchasing a more expensive LTD policy that would not allow any CPP-D to be offset.
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I think there are some grey areas. Non-taxable LTD deducting pre-tax instead of post-tax CPPD amounts would be one. LTD offsetting only the initial CPPD amount and not adjusting the deduction for inflation adjustments to the CPPD would be another.
Re common law, assuming you’re not in Quebec, that’s just the term for anything that gets decided through the court system. You have the Constitution, the statutes/legislation/regulations, and the common law (court decisions).
Yes I am aware that it’s odd. Lets’'s approach from a different angle. CPP forms a contract with the gov, the employer and myself. Would you agree?
They grey area is caused by the legislation. Look at section 65(3) of the Canada Pension Act. It is this section that I allege functions as a loophole.
65(3)Exception
(3) Despite subsections (1) and (1.1), if an administrator of a disability income program who is approved by the Minister makes a payment under that program to a person for a month or any portion of a month that would not have been made if a benefit under paragraph 44(1)(b) or (h) had been paid to that person for that period and subsequently a benefit becomes payable or payment of a benefit may be made under this Act to that person for that period, the Minister may, in accordance with any terms and conditions that may be prescribed, deduct from that benefit and pay to the administrator an amount not exceeding the amount of the payment made under that program.
Without disclosure of approval- we never know who is approved. There is no definition of administrator aof a disability income provider. Any entity can apply. There is no criteria for rejection. Payment is defined in regulation 76.1 as excess payment --meaning advance assitance or welfare.This section is very vague and broad.
One other point, that I have discussed is the fact that 65(2) contains the same level of confusion, but it involves all pensions.