If received, CPP disability benefits are deductible as other income replacement assistance in calculating the IRB payable. But it is important to understand the interplay with other benefits, and other components of CPP disability benefits that shouldn’t be considered.
This discussion must start with qualifying for the Canada Pension Plan (CPP) disability benefits. An insured may qualify to receive CPP disability benefits if they:
- are under 65 years of age;
- meet the CPP contribution requirements; and,
- have a severe and prolonged disability.
That said, the insured must be approved by a Service Canada medical adjudicator, which takes approximately four months, and the decision is based on a number of requirements. This just means there is no certainty when or if benefits will be received.
Summary: Unlike CPP disability benefits, CPP child benefits are not deductible as payments for loss of income from the IRB.
What is the CPP Child Benefit, and when is it paid?
Let’s first look at what a qualifying child is:
- The natural child of the CPP contributor
- A child “adopted legally” or “in fact” by the CPP contributor while under the age of 21
- A child “legally” or “in fact” in the custody and control of the CPP contributor while under the age of 21
Further, the dependent child must be either:
- under the age of 18, or,
- if between the ages of 18 and 25, they must be a full time student.
In regard to the benefit itself, there are two different types available:
- For a child who is in the care of an individual receiving the CPP disability benefit; and,
- For a child who was in the care of an individual at the time of the individual’s death.
In both instances, the individual must have made enough contributions to CPP to qualify. To determine whether an insured might qualify for CPP disability benefits, see our blog on that very topic.
The CPP child benefit is paid monthly and fluctuates annually with the Consumer Price Index. The payment is received as a single lump sum amount, combined with the CPP disability benefit. It is for this reason, you must be able to assess if CPP child benefits are being received.