Offset of Canada or Quebec Pension Plan Disability Benefits
Effective date: December 1, 2016
Application: All claims.
Policy subject: Benefits - General
To establish guidelines for deducting Canada or Quebec Pension Plan (CPP/QPP) Disability Benefits from loss of earnings benefits.
Customer means an injured worker or a surviving dependent spouse.
Periodic Benefits for the purpose of this policy means benefits relative to the death or injury of a worker that the worker or the worker’s surviving spouse is entitled to receive from Employment and Social Development Canada (ESDC – Service Canada) under the Canada Pension Plan or the Quebec Pension Plan (e.g., Disability Benefits or Survivor Benefits) (Section 95).
Offset means deducting CPP/QPP Disability Benefits from loss of earnings (wage loss) benefits.
- A customer may be entitled to both wage loss benefits under The Workers’ Compensation Act, 2013 (the “Act”) and CPP/QPP benefits under the Canada Pension Plan for the same period of entitlement.
- CPP/QPP benefits must be offset from compensation benefits effective on the anniversary of the commencement of loss of earnings resulting from the injury. After this date, 50 per cent of the worker’s or the worker’s surviving spouse’s periodic benefits are to be considered as wages that the worker is capable of earning for the purposes of:
- Calculating the compensation to be paid by the WCB for loss of earnings; or
- Determining the worker’s surviving spouse’s entitlement (Section 95).
- The Act refers to minimum compensation benefits payable as a result of a work injury (Sections 70(5), 74, 75, 77, and 81(1)(b)). WCB interprets these provisions to mean there should be a minimum level at which no offset of CPP/QPP benefits occurs. Where full offset reduces benefits to below the minimum compensation level, only a partial offset will occur.
- Awards and allowances also exempt from any offset of CPP/QPP benefits include:
- Permanent functional impairments (Section 66).
- Independence allowance (Section 67).
- Dependent children allowance (Sections 83, 84, 85 and 89).
- CPP/QPP benefits accrue separately to dependent children of an injured or deceased worker. The practice of both the Canada and Quebec Pension Plans are to pay children’s benefits to the worker or surviving spouse until the child reaches 18 years of age. Thereafter, CPP/QPP benefits are paid directly to the child.
- Increases to CPP/QPP benefits are calculated each January by ESDC using the Consumer Price Index (CPI). Wage loss benefits are adjusted during the annual benefit review on the anniversary date of the commencement of loss of earnings using the average percentage increase of the all-items Consumer Price Indices for Regina and Saskatoon (Sections 2(1)(i) and 69).
- Effective January 01, 2014, customers receiving the maximum wage rate under the former Act may receive an increase to their maximum wage rate annually. Previously, CPP/QPP was not adjusted annually for these customers unless the maximum wage rate increased. During the annual benefits review in 2014, the offset for these customers was adjusted to reflect the CPI percentage increase to CPP/QPP in 2014 only so that they would receive an increase to their wage base due to an increase in the maximum wage rate. Going forward, the offset for these customers will continue to be adjusted annually to reflect the percentage increase to CPP/QPP.
- Canada or Quebec Pension Plan (CPP/QPP) disability or survivor benefits will be considered wages the worker or the worker’s surviving spouse is capable of earning.
- WCB will offset 50 per cent of the CPP/QPP benefits a worker or the worker’s surviving spouse receives as a result of the work injury.
- For a worker, the offset will be applied 12-months after the commencement of their initial loss of earnings and once they qualify for CPP/QPP disability benefits. The offset will continue to be applied as long as they qualify for CPP/QPP disability benefits because of a work injury.
- For the surviving spouse, an offset will be applied 12-months after they qualify for WCB spousal benefits (POL 24/2016, Dependent Spouses – Initial Entitlement and Re-Employment Assistance). The offset will continue to be applied as long as they qualify for CPP/QPP survivor benefits.
- All customers will have their wage loss benefits adjusted during their annual benefit review to reflect an increase to their CPP/QPP benefits. This review is completed on the anniversary date of the original commencement of loss of earnings.
- If a worker qualifies for CPP/QPP benefits and is receiving WCB estimated wage loss benefits (less than full benefits), the amount of CPP/QPP offset will be prorated.
- Wage loss benefits will not be subject to a CPP/QPP offset if the customer is receiving minimum compensation or actual earnings. A partial offset will occur if full offset would reduce WCB benefits below minimum compensation.
- Only CPP/QPP benefits payable to the worker or worker’s surviving spouse may be offset. Any CPP/QPP benefits payable to dependent children are exempt.