Before I describe my issue, I will briefly describe my situation: I have been on LTD for 9 years, and earlier this year I qualified for CPP. I have been in possession of the CPP RETROACTIVE lump sum for months now.
Issue:
Last week, I received my monthly LTD payment for the month of September: it was less than half the expected amount.
NOTE: this reduction is in ADDITION to the normal CPP OFFSET. In other words, I received less than half of (full LTD -CPP OFFSET)
I have already contacted my insurer, informing them that I received less than half the expected monthly amount.
MY HUNCH:
There is a strong chance that this is related to the lump sum repayment. For months now, I have been asking them to provide
1- A FULL BREAKDOWN OF THE AMOUNT TO REPAY and 2- A MODALITY OF REPAYMENT. They have not replied.
My guess is that this is their way to avoid providing any breakdown of the lump sum. (It would be too complicated to explain why I believe they do not wish to provide a full breakdown of the lump sum, but this is related to the previous threads I opened in this forum)
Can they do this without my consent? What are my options?
Insurers will often unilaterally deduct up to 50% of a person’s monthly benefit in order to collect on an outstanding overpayment debt. If you don’t (or can’t) pay the full overpayment back soon after receiving the lump sum payment from CPPD, then insurers will take it out of your payments. Whether they can do it will depend on the wording of your policy, but likely the policy allows them to do it.
Usually, an insurer will give notice to you about need for repayment in full of the outstanding overpayment. They will also work with you to set up a repayment plan if you can’t pay over the full CPPD retroactive amount.
David Brannen
Disability Lawyer with Resolute Legal
The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team.
Would it make sense to ask them to allow me to repay all at once?
What do you think?
The one reason I can think is that they are reluctant to give me a full brekdown of the sum I owe. I was just given a sum amount in an offhand manner, but it is actually less that my calculations.
I am trying to make the commit to an OFFICIAL amount and to give me a TOTAL breakdown including the amounts I owe due to DOUBLE PAYMENT after I started to get paid by CPP.
Besides that, I am unsure of then pros and cons of paying back piecemeal by deduction from LTD versus a lump sum.
To summarize:
-were I to ask to pay it all at once, would they have a reason to refuse? Is their lack of commitment to providing a FULL BREAKDOWN of the sum I owe a real reason to refuse?
-is it a question of POWER on their side? Ie, to be able to deduct at will from the monthly amount?
They should be able to give you the total of what they believe you owe. If they haven’t done so, very possible that they are waiting on an internal legal opinion on the net vs gross. Very doubtful this is any kind of power play. Just keep asking for a breakdown and confirmation of what they believe you owe. They will gladly accept a one time payment for the full past debit.
once you get a satisfied answer on the lump sum owed, a good financial strategy would be to (if you have it), take money from your investments that will trigger the less amount of capital gains, then pay the insurer. Then borrow those same funds to put back into your investments and at least your payment to the insurer becomes a tax deduction on the interest paid on the borrowed funds.
