Oct 9, 2024
Managing your finances can be dfficult, especially for those with a disability. In fact, it’s estimated that there are 1.6 million Canadians with disabilities that are living below the poverty line. The Canada Pension Plan (CPP) disability benefit helps Canadians who can’t work because of a severe and prolonged disability. However, with the cost of living continuing to rise in the country (most notably for essentials such as food and housing), it can be a struggle to make ends meet, even with government assistance. Is the Canada pension plan disability assistance enough to live on, and are there other ways to supplement the disability benefits to make it easier to maintain your financial health?
What is the CPP disability benefit?
The Canada pension disability benefit is a monthly payment available to qualifying individuals who can’t work because of a mental or physical disability. The benefit is intended to replace a portion of the income you would lose due to your inability to work. It’s important to note that the CPP disability benefit is not meant to replace a person's entire income, but rather to provide some additional financial stability until they reach the age of 65, at which point a person begins to receive their regular CPP retirement pension.
Essentially, the Canada Pension Plan disability program offers two separate benefits:
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- Disability pension: This benefit is designed for individuals who qualify for the program and are not currently receiving a CPP retirement pension.
- Post-retirement disability benefit: This benefit is for people between the ages of 60 to 65 who become disabled after they have already started receiving their CPP retirement pension. It offers additional financial assistance to help these individuals cope with the challenges of living with a disability.
In essence, the program caters to two different groups of people: Those who become disabled before reaching retirement age and those who become disabled after they have already started receiving their retirement pension. By providing these two separate benefits, the CPP disability program aims to ensure that individuals with disabilities receive the support they need, regardless of when their disability occurs in relation to their retirement.
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Can I get Canada Pension Plan disability benefits?
To receive the Canada Pension Plan disability benefits, there are three main overarching criteria:
- You must have contributed to the Canadian Pension Plan in four of the last six years. Or if you have contributed to the CPP for 25 years or more, you can apply if you’ve contributed in three of the last six years. This requirement ensures that applicants have made enough contributions to the plan before receiving benefits.
- Your physical or mental disability must be severe and of a long or indefinite duration, such that it prevents you from earning a livable wage. This means that your condition must be serious enough to significantly impact your ability to work and earn an income.
- A third criteria is that applicants must be between the ages of 18 to 65.
Is it enough to live on?
The amount you receive from CPP disability depends on how much and for how long you contributed to the Canada Pension Plan. As of 2024, the base monthly amount is $583.32. The government then adds some money to this minimum amount based on how much you paid into the Canada Pension Plan while you worked. The total maximum monthly CPP disability benefit is presently at $1,606.78 (as of January 2024), however, (thanks to the introduction of CPP enhancement in 2019) the monthly maximum disability amount increases every month. By December 2024, the max monthly CPP disability benefit will reach $1,616.52. Furthermore, each January the amounts are reviewed to ensure they change according to the cost of living. While the amount can be increased, they can’t be decreased.
Note also that your Canada Pension Plan disability amount is taxable, meaning that you will have to pay taxes on the amount received depending on your tax bracket.
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Are there disability benefits besides Canada Pension Plan disability?
Even if you receive the Canada Pension Plan disability benefits, it can still be very hard to make ends meet if you’re disabled and unable to work. Luckily, there are some other sources of income that you may be able to draw on to help stretch your budget:
Provincial plans: Some provinces offer additional disability benefits to help supplement Canada pension disability funds. For example, programs such as Assured Income for the Severely Handicapped (AISH) in Alberta, Ontario Disability Support Program (ODSP) in Ontario and Persons with Disabilities assistance (PWD) in British Columbia.
Disability Tax Credit (DTC): This is a non-refundable tax credit. It doesn’t provide those who are disabled with money but rather can potentially reduce the amount of income tax they (or family members who help care for them) owe.
Registered Disability Savings Plan (RDSP): A savings program where the government contributes matching grants for those eligible for the Disability Tax Credit.
The Canada Workers Benefit (CWB) supplement: The CWB is a tax credit to help people who work but are earning a very low income. This benefit also has a supplement available to those with disabilities.
Canada Disability Benefit Act: The federal government also recently introduced a bill to provide additional financial support to working-age Canadians with serious and prolonged disabilities. The proposed maximum monthly benefit is $200 and payments will start in July 2025.
How do I apply for CPP disability benefits?
To apply for CPP disability benefits, you’ll need to get the application kit from the Service Canada website. You then complete the application form (ISP1151) and have your doctor or nurse practitioner fill out the medical report form (ISP2519) attesting to your disability. You’ll then be required to submit your application online through your My Service Canada Account (MSCA) or by mail. It can take up to four months to receive a decision about your application.
Sources
1. CBC: Canada Disability Benefit won't lift 'hundreds of thousands' out of poverty, new numbers confirm (Jun 7, 2024)
1. Service Canada: Canada Pension Plan disability benefits
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Sandra MacGregor has been writing about finance and travel for nearly a decade. Her work has appeared in a variety of publications like the New York Times, the UK Telegraph, the Washington Post, Forbes.com and the Toronto Star.
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