Canada Pension Plan Disability Benefits

Introduction

The Canada Pension Plan pays disability benefits to contributors who become disabled and are no longer able to work. Section 42 of the Canada Pension Plan Act (herein referred to as the "Act") defines a person as disabled:

• "only if he is determined in prescribed manner to have a severe and prolonged mental or physical disability, and ...
• a disability is severe only if by reason thereof the person ... is incapable of pursuing any substantially gainful occupation, and
• a disability is prolonged only if it is determined in a prescribed manner that the disability is likely to be long continued and of indefinite duration or is likely to result in death."

Quantum of Benefits

Benefits are calculated based on contributions that a person has made to the Canada Pension Plan. The benefits are specifically a fixed amount (in 1998 this was approximately $303.00) plus 75% of the estimated retirement pension. The range of possible benefits is approximately $380.00 to 903.55. In addition to basic benefits to be paid to the contributor, there are monthly benefits allowable to the contributor’s dependant children as defined in the Act. These are a fixed amount of $173.33 per child as of 1999.

Qualifying Period

There are minimum contribution requirements which must be met in applying for disability benefits. The contribution test must be met at the time the disability commenced and not at the time of application. The general rule for persons whose disability commenced after January 1, 1998 is that contributions are required in four of the last six calendar years on earnings that are at least 10 % of the year's maximum pensionable earnings ($36,900 in 1998). For persons whose disability commenced prior to the end of 1997, contributions are required for either two of the last three, or five of the last ten years at the time of commencement of the disability. Where the application for disability benefits is not made forthwith upon becoming disabled, section 42 (2) (b) of the Act provides that a person can be found disabled up to a maximum of 15 months prior to the date of the application. Arrears of benefits will therefore only be payable for a maximum of 12 months (15 months of arrears less a 3 month waiting period.)

Therefore, even if a contributor has not been working for some period of time, as long as the disability can be shown to have taken place within the qualifying period, the claimant can be approved for benefits. However, arrears of benefits will only be awarded for up to one year prior to the date of application.

Appeals Procedures

If the claimant is not satisfied with the initial response of the Canada Pension Plan, there are several appeal procedures in place. The first is to ask for a reconsideration of the decision. The request for reconsideration must be made within 90 days of the date the claimant receives the letter of denial. A request for reconsideration is very rarely successful and is simply a review of the decision to deny benefits based on the existing paperwork and medical reports. The request for reconsideration is much more effective if new medical evidence can be produced that helps to substantiate the disability. The most common reasons for denial of benefits are that the disability is nor severe or that the disability is not prolonged.

The next level of appeal is a Review Tribunal. The request for an appeal to the Review Tribunal must be made within 90 days of the last denial letter. The appeal is as of right and the letter requesting a Review Tribunal can be as simple as "I appeal." The Review Tribunal is a panel of 3 individuals that meet at a local hotel to have a quasi hearing as to the issues in dispute. The panel is constituted of one member of the legal profession (usually a lawyer), a member of the medical profession (usually a registered nurse or physician) and a member of the public at large. The hearing is designed to be very informal and is not even based on sworn testimony. It is closed to the public and only parties to the appeal, their witnesses and their advisers are allowed to attend. The claimant is advised of the date of the review (usually approximately one month in advance.) At the review, the usual rules of evidence do not apply as it is an administrative proceeding. The claimant can be represented by a lawyer although that is not necessary. The panel usually asks questions and tries to come to a determination of whether the claimant is disabled. The hearing usually takes one to two hours. The Minister has a representative who is a non-lawyer spokesperson an who takes the other side in an attempt to show the claimant is not disabled. After the review, the panel makes a decision that gets mailed out to the claimant in 10 to 12 week’s time.

If the decision is in the claimant’s favour, the minister has 90 days to decide whether or not to appeal. Until that decision is made, no funds will be advanced to the claimant. If the minister decides to appeal, he has to make an application for Leave to Appeal to the Pension Appeals Board. The application is made ex parte on paperwork and asks for permission to appeal to the Pension Appeals Board.

If the decision is against the claimant, the claimant must make an application for leave to appeal to the Pension Appeals Board. The application is made ex parte on paperwork only (no oral representations are allowed) and should, if possible, provide updated medical evidence. It is also helpful if the submission addresses the issues raised in the denial of benefits by the Review Tribunal. If the application is granted, a Pension Appeals Board hearing is scheduled. If the application is denied, the decision of the Review Tribunal is final and binding. As is the case with all administrative tribunals, administrative law principles would apply in cases of judicial review.

The test for leave to appeal appears ambiguous and has not been considered in any judicial review decision or in any of the available decisions of the Pension Appeals Board. It appears that the test is in the personal discretion of the Chairman or designate of the Pension Appeals Board. It is a very important step, as denial of leave will result in no further appeal procedures. Leave to appeal is not granted as a matter of course and should not be taken for granted, as the Chairman or designate will exercise deference to the decisions of the Review Tribunal. For this reason, it is recommended that new evidence, such as medical reports, be obtained at this point in order to pique the interest of the Pension Appeals Board to the extent that they will grant leave.

If leave to appeal is granted the next step is a trial de novo before the Pension Appeals Board. This board is usually constituted with three federal court judges. The hearings are held for approximately one week as the need arises in one of the court houses in Regina or Saskatchewan. The hearings are currently being held slightly more than one year apart. The hearings are open to the public and are the final level of appeal.

The trial de novo is more formal that the Review Tribunal hearing. However, because they are administrative hearings, they are more informal than regular court and the rules of evidence are relaxed. An average case usually takes 2 hours and the Pension Appeals Board tries to schedule two or three cases per day. The case for the disabled claimant is usually made up of testimony from the claimant with the filing of supporting medical reports. Expert witnesses can be called although they are not strictly necessary. The case for the minister consists of cross examination of the applicants witnesses and the testimony of a medical doctor who is a private doctor on contract with the minister to testify on behalf of the minister. The doctor has usually never seen the applicant but testifies as to his review of the medical file assembled by the minister. S/he usually cannot say the applicant is, or is not, disabled and confines him/herself to reporting that there is no "objecitve" medical evidence substantiating the disability claimed. The decision is reserved and written reasons are provided in 8 to 12 weeks by registered mail. Some of these decisions are reported in full by the Commerce Clearing House (CCH) Canadian Employment Benefits and Pension Guide Reports. The decisions are non-binding on the Pension Appeals Board and the principle of stare decisis does not apply to decisions of the Pension Appeals Board, which is a statutory administrative tribunal. However, in practise, although the Review Tribunals are not bound by the Pension Appeals Board, they do pay some deference to previous decisions of the Pension Appeals Board.

The decision of the Pension Appeals Board is final and there are no more avenues of appeal.

Proof of Disability

Effective September 30, 1995 the Minister in charge of the Canada Pension Plan changed the policy of how applicants over the age of 55 are treated. From 1988 to September 1995 applicants over the age of 55 were considered disabled if they were unable to do their own job. This directive was changed in 1995 in an ISP Policy Guideline. All claimants are now treated equally regardless of age.

The interpretation of the Act also provides that socio-economic conditions such as:

1. Regional unemployment rates
2. Local access to specific jobs
3. Occupational skills needed for those industries
4. The predominant language spoken in the region

One of the largest stumbling blocks in proving disability is proving that the disability is severe. The Act defines "severe" as a mental or physical condition that prevents an individual from regularly pursuing any substantially gainful occupation. Persons who can still carry on sedentary types of occupation are not considered disabled within the meaning of the legislation. Proof will have to be provided that the claimant cannot even do sedentary types of occupations. The best proof of this is evidence from a psychiatrist or psychologist which shows a mental condition which prevents the applicant from pursuing this type of occupation. CPP will often find that persons with purely physical problems will still be able to carry on sedentary type occupations. If the claimant can do sedentary type occupations (even if retraining is required), he or she is not disabled within the meaning of the Canada Pension Plan.

"Substantially gainful employment" is not defined in the Act. However, the Pension Appeals Board has stated that the income earned in the past is not relevant in determining what is substantially gainful. A doctor who may have earned in excess of $100,000.00 per annum prior to his/her disability is considered able to pursue substantially gainful employment is s/he can still earn $15,000.00 per annum working part-time. Past earning history is relevant not to the determination of substantially gainful, but rather to ascertain whether the applicant possesses any transferrable work skills that would enable him or her to earn some income.

The Plan also looks at whether the disability is legitimate or if it is the applicant’s personal lifestyle choice. If the doctor referred to earlier becomes unable to practise medicine but can still work at a 7-11 convenience store, s/he will not be considered disabled as s/he can still pursue "substantially gainful" employment.

Another common misconception in the public is that the Canada Pension Plan is somehow responsible for retraining. If the evidence presented shows that an applicant can be retrained within a reasonable time period, the applicant is not disabled. Often times applicants say that there is no available job for them. That is a socio-economic factor and cannot be taken into account.

Another relevant factor is that the disability must be "prolonged." This has been interpreted to mean that the disability must be both of long continued and of indefinite duration. Prolonged does not refer to past duration, only to the future. No matter how severe the disability is, it must be of long duration. The rule of thumb is that if the capacity to work would normally be regained within a year it is not prolonged. The second test is that the disability must be of indefinite duration. If the disability will only continue for a definite duration (regardless of the length of time, even if greater than one year) the claimant is not disabled. For example if a person has a heart attack for which the prognosis is a return to work within 6 months the disability is not prolonged.

It is helpful to remember these concepts when preparing for either a Review Tribunal or Pension Appeals Board hearing. Also, remember that expert reports from either medical doctors or psychologists providing "objective" evidence of the disability, although not critical to the case, will go a long way toward proving the claimant’s disability.