Tag Archives: income replacement assistance

How do Canada Pension Plan Disability Benefits impact the IRB?

Summary:

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.

Background:

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.

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IRB Methodology – How do you calculate an Income Replacement Benefit

Summary

It appears the New SABS (O. Reg. 34/10 – from Sept 1, 2010 to current) have been drafted to bring greater clarity to the methodology of calculating the IRB, based, in part, on conclusions in arbitration decisions at the Financial Services Commission of Ontario (FSCO).

The ordering of the component parts to calculate the IRB appears to be unambiguous and is performed in the following steps (for the first 104-weeks of disability if the individual was less than 65 at the date of entitlement):

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