Receiving company pension and CPP disabilty


#1

Hello,

I was just wondering if someone could please let me know the answer to my question.

I will be turning 55 in July. I am able to get a company pension starting at age 55 . Will taking a company pension monthly reduce my monthly CPP disabilty cheque. This would be in Ontario.

Thank you in advance,
Niluma


#2

These questions are very hard to answer without knowing a lot about your situation and the specific type of company pension you have.

There is nothing that will reduce your CPP disability cheque; however, sometime other payors can reduce their payment based on what you are getting from CPP disability.

Assuming it is not a disability pension from your work, then generally speaking there will be no impact on your CPP disability. You can get a full CPP disability payment and your pension payment, unless the pension payment is also for disability.


#3

Thank you David for answering my questions. My company pension will not be reduced in any way and I can start receiving it at age 55. I was just worried that my CPP disability would be reduced while receiving the company pension. I know that you can earn while WORKING up to $5400. and still receive your CPP disability without it being reduced. I will be making over that amount receiving the company pension, so I was worried any amount earned in any way would reduce the CPP. So to clarify any earned income in any way besides Working will not reduce your CPP disability and they cannot cut you off due to income received, obviously only if you are able to go back to work.

Thank you so much for answering my question.


#4

CPP disability makes a distinction between employment income and other types of income (company pensions, passive investments, RRSP withdrawals, etc). CPP Disability focuses on your capacity to work and capacity to earn income from employment. If you have non-disability income from other sources that are not employment, then it will not affect CPP disability.

The only exception is if your income is from other CPP payments, like CPP retirement or CPP survivor pension. There are implications for the CPP payments collectively in that situation. For example, you can draw both CPP disability and CPP retirement. Stick with the disability as long as you qualify. If you get a CPP survivor pension, the the total of both the CPP-D and CPP-S cannot exceed the max allowable CPP-D amount.


#5

Hi David

Is pay in lieu of notice treated in the same manner as severance pay. Specifically, does pay in lieu of notice reduce you CPP-D benefits?

Thanks


#6

Severance pay is a bit of a general term that encompasses many situations, including “pay in lieu of notice”. Pay in lieu of notice is employment income. The employer is simply choosing to pay it out to you in advance rather than continuing to have you show up for work during the notice period. The notice period is the amount of notice an employer or employee must give to end employment.

It would not decrease your CPP disability benefits per se. Generally speaking, CPP disability does not offset income as you see in LTD insurance policies. Rather, with the CPP disability program they care concerned with whether you can perform “gainful employment”, which is defined by regulation as the ability to earn approximately $15,000 (in 2018 dollars).


David Brannen

Disability Lawyer with Resolute Legal

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