Making sense of cpp, wlrp,


#1

Hello

I have been on LTD since 2009, and I have applied for CPP last year, qualifying for it in the March timeframe of this year. (My disability was continuous since 2009).

In recent times I have been trying to figure out all the nuances of the rules and regulations as they apply to my situation, in particular wrt CPP and LTD. While I think I have found some answers, I am also confused about all of the seemingly contradictory information that I encountered.

As such I have thought to first list my FACTS, then my GUESSES, and finally the CONFUSING QUESTIONS that I still have not been able to figure out.

FACTS:

-I am under a group insurance contract.
-My LTD income is not listed on my T4.
-My LTD benefits are paid on a monthly basis, and are tax free.
-My employer controls the STD, and can invoke an IME examination wrt to STD qualification. My insurance company can also invoke an IME examination when one applies for LTD. (I am mentioning this because I am unsure whether my LTD plan is a WLRP, and I think the determination of this fact is based on the degree of control of the employer over the disability determination?)
-My benefits booklet states that if I paid my LTD premiums in full then I will not be taxed on my LTD benefits.(Since I have not been taxed on my LTD, I assume my employer paid them in full on my behalf)
-My employer provides some sort of non cash income on my T4, which varies wildly across years (from 50$ to 800$) and is listed on all three of the following boxes: 14 (total income), 26 (pensionable income), 40.

GUESSES:

-I guess that my work insurance is not an ASO arrangement.
-I think that since I SEEM TO BE in an EMPLOYEE PAYS ALL arrangement, my LTD is not pensionable income and that my employer, or DEEMED employer (my insurer) does not have to pay CPP contributions on my LTD payments.

PART 2: MY FOUR CONFUSING/ CONFUSED QUESTIONS:

QUESTION REGARDING CPP RETIREMENT PENSION:
My disability and subsequent LTD qualification occurred in 2009. However, I only applied for CPP in 2017, and qualified for it in 2018, (with a lump sum going back to 2016).
It is my understanding that at CPP RETIREMENT TIME I can ask for my CPP retirement pension to be based on the “DATE DEEMED DISABLED OF 2009”, and as a result, my CPP retirement pension will BE CALCULATED BASED ONLY on the months PRIOR to my 2009 disability, and as such, the period of time when I was on LTD but NOT ON CPP, (ie 2009-2015) will not be considered, ie will not impact negatively my retirement pension. Am I correct?
As well, Is there something that I can do now, to make that request now, or do I have to wait for retirement time to ask for
the recalculation?

QUESTION REGARDING WLRP:
My current question is contradictory to the previous question I just asked. I have been trying to figure out what WLRPs are and if my LTD is such. However, I just got confused, and it seems that there have also been changes to legislation.
Based on my FACTS above, is my LTD also WLRP? I understand that if an LTD plan is WLRP and also CPP pensionable, then the insurance company has to pay CPP premiums.
I also read that one can ask GOC for a ruling on whether an LTD is WLRP.
Should I do that?
Should I try to see if there should have been CPP premiums that should have been paid on my behalf from 2009-2016 so that at retirement time, my CPP is higher?

QUESTION REGARDING LUMP SUM:
While I was researching WLRP I encountered the following statement: “when the EMPLOYEE PAYS ALL then source deductions apply to lump sum as well. (only the employers contributions are recognized as taxable benefits)”
What is “source deduction” in this context? Is it taxation?
Does this mean that any lump sum offer I may be offered will be taxable, (even if the periodical benefits are not)?

QUESTION REGARDING T4:
Throughout the years, my employer has been reporting income in box 40, box 14, BUT ALSO in box 26, ie pensionable income. My guess is that the income they listed is taxable benefits related. Should they have listed the amounts in box 26 as well?
I have not yet gotten a T4 since I recently qualified for CPP. Does this mean that on my next T4 from work I will have 0 in my box 26, even if there will be some income in box 40?

Concluding, I appreciate any information that might help me make sense wrt any of the above.

My regards, alecs


#2

You don’t do anything, CPP-D automatically converts to CPP at age 65 and is calculated based on the months prior to your disability.

I never had a WLRP (maybe I did to bridge the waiting period until I got LTD).
You can’t contribute to CPP if you’re getting CPP (or CPP-D).
Since you were probably obligated to apply for CPP-D and have it, I think the question is irrelevant.

It sounds like taxes.

No idea, I don’t know if I will get t4s, probably mostly 0s.


#3

Hi

Thank you for your reply

Alecs


#4

These questions are a bit too in depth for me to answer on the forum; however, I can say I don’t necessarily believe your assumptions are correct. From what you are saying, this doesn not seem like an ASO situation, but I could be wrong on that. Keep in mind that once you start receiving LTD payments, you no longer pay into EI, CPP etc. You would not receive T4s or T4As if your LTD benefits are non taxable. When LTD benefits are non-taxable, your employer does not pay the taxes either. With some fully employer sponsored plans (non insurance plans) that can be different.


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.


#5

Hi David

Thank you for your reply.
My T4s are from employer, and my guess is that the small amounts I have listed (between 50$ and 800$) are related to taxable healtcare benefits, or life insurance.
My ltd, paid by insurer, is exactly 50% of my gross salary, and non taxable.
I also think it is non ASO.

I have one concern: I really wish to eliminate the guesswork wrt whether my LTD is a WLRP. This will clarify my understanding of where I stand, whether there are actions I should take or not.

Is there anything in my “Facts” (in my initial post) that might point to the answer. I know the answer is tied to the degree of control the employer has upon the plan, but then it gets complicated.

Regards, alecs


#6

If the wage loss replacement program was my STD, I did contribute to CPP and ei (I think my CPP-D amount was calculated without counting those). When I started getting LTD I didn’t contribute to CPP or ei anymore.


#7

I really can’t speculate and would need to do a full review of the policy and other docs. Its the kind of thing you would need to get a paid consultation from a lawyer because the answer can be very tricky.