New Disability Benefit Will Help Some People on CPP Retirement Pensions

April 22, 2020

New disability benefit will help some people on CPP retirement pensions

From the March 2019 Issue of ON THE RADAR – the E-newletter of Community Legal Education Ontario

Recent changes to the Canada Pension Plan (CPP) mean more money for some people who are 60 to 64 years old and have a disability. This month’s On the Radar newsletter explains the new post-retirement disability benefit, why it was needed, and who can get it.

What was the problem for 60 to 64-year-olds with disabilities?

Two main types of Canada Pension Plan (CPP) benefits are disability and retirement benefits. People must be under 65 to get disability benefits.

Retirement benefits normally start at age 65, but people can choose to start them as early as age 60.

Switching from retirement to disability benefits

People under 65 who are already getting retirement benefits can sometimes cancel them and replace them with disability benefits. They might want to do this because CPP disability benefits are usually more than retirement benefits.

For this to happen, they must:

If they don’t meet both of these conditions, they have to stay on retirement benefits.

How can the new benefit help?

The new post-retirement disability benefit is for people who must stay on retirement benefits for one of the above reasons. Now, when they apply for CPP disability, they’ll automatically be considered for the new benefit.

If they meet the CPP definition of disability, they can continue receiving their CPP retirement benefits plus this new benefit of about $500 a month.

How can the new benefit help?

If they meet the CPP definition of disability, they can continue receiving their CPP retirement benefits plus this new benefit of about $500 a month.

The total for most people will be almost as much as if they’d been able to switch to disability benefits. And some people will get even more.

Turning 65

When people on CPP disability benefits turn 65, they automatically start getting retirement benefits instead.

The new post-retirement disability benefit also stops at 65. So people who were getting it, continue being paid the retirement benefits that they were already getting.

Why the new benefit might not solve the whole problem

When people start getting their CPP retirement benefits before they turn 65, their benefits are less each month than if they waited until 65.

So, when the post-retirement disability benefit stops at age 65, people who were collecting it will continue getting these lower retirement benefits. That means that they could be worse off than if they had been able to cancel their retirement benefits and replace them with disability benefits. But other benefits might help make up the difference, such as Old Age Security (OAS) and the Guaranteed Income Supplement (GIS).

People who were able to cancel their early retirement benefits start getting full retirement benefits when they turn 65. The same applies to people who never took early retirement benefits in the first place.

Getting legal help and advice

The new post-retirement disability benefit can help some people who are 60 to 64. But there can be other factors to consider, for example, if there are other types of benefits or insurance available.

So it’s a good idea for people in this situation to get more information and advice.

Disclaimer: This article gives general legal information. It is not a substitute for getting legal advice about a particular situation.