My LTD is forcing me after 6 years off work to apply for CPPD. There is a clause in our contract tjat they can do this however my fear is the lump sum payback from CPP. There is nothing that states my LTD can take this money if paid. Seems to me i will be stuck with a large tax bill as my husband claims me and makes fairly high income???
If you search the forum there are a lot of detailed threads on this topic. The bottom line is that most policies do require people to apply for CPP-D. If you don’t apply, they often have the right to estimate the CPP payment amount and simply deduct it from your current monthly LTD payment.
In 99% of cases, the insurance company would be entitled to repayment for any months where there is overlap from a retroactive CPP payment and months where you were paid LTD benefits. In practical terms this means that almost the entire CPP retroactive payment would be paid to the insurance company.
Taxation of the CPP lump sum can cause issues in some cases. If your LTD benefits are taxable, then you are not taxed on the CPP lump sum payment; however, if your LTD benefits are non-taxable, then you will be taxed on the retroactive CPP payment, even if it is paid over to the insurer. You can minimize the taxation implications by making sure the monies from the CPP lump sum are taxed in the year they would have been paid. This spreads it out. You can also minimize the tax implications by getting approved for the Disability Tax Credit.
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 reliabile 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.
Thank you for the prompt response. What happens if i think i have a solid
case against my insurance company as they have failed to provide me with a
return to work. In the meantime they put me trough rehabilitation with
useless companies that have proven to not be there for me. I have so much
on them even refusing a gradual return to work while doing rehab. Doctors
and therapist were all on board and it was refuses by their rehab
consultant. I feel trapped and have no clue what to do.
They way most policies are worded, you don’t have a right for them to pay for vocational retraining or to pay you during a gradual return to work, rather it is in their discretion to decide to do so. You would need to get a legal opinion on your own policy to confirm if this is how it would apply in your case.
This would be a reason to apply for CPP disability because they are much better to work with during gradual return to work scenarios. I have always found them very good to work with in these situations.
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 reliabile 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.