In a disappointing decision released on January 18, 2019, the Human Rights Tribunal of Ontario ruled that insurance companies do not discriminate when they deduct benefits received from a Canada Pension Plan Disability pension from long-term disability insurance payments.
Background on the Case
Disability insurance plays a critical role in ensuring that those who are off work due to disability have access to the income they need to survive. Every worker contributes to the Canada Pension Plan and many also contribute to private long-term disability insurance plans through their workplace.
However, payments from disability plans are always less than the worker earned while they were working. This often leaves a big income gap at a time when the worker’s expenses are actually higher because of their disability-related needs. Persons with disabilities often have higher costs of living because they have to pay for things like medications, assistance with daily care, travel for treatment, and housing that can accommodate them.
To compound this problem, private insurance companies have a practice of deducting Canada Pension Plan – Disability (CPP-D) benefits from long-term disability payments. But CPP-D payments are only made to workers who can show that they have severe disabilities that will prevent them from working for a long time. The deduction of CPP-D from long-term disability payments means that those with the most severe disabilities actually get less from their long-term disability insurance company than those with milder disabilities.
Paul Reilly is on a long-term leave from Ford Motor Company, and qualifies for both CPP-D and long-term disability through Ford’s private insurance plan. The Ford plan deducts his CPP-D payments dollar-for-dollar. He challenged that practice in an application at the Human Rights Tribunal of Ontario on the grounds that it discriminates against him on the basis of disability.
The Income Security Advocacy Centre partnered with the HIV & AIDS Legal Clinic Ontario and the ARCH Disability Law Centre to intervene in the case. Our coalition argued that it is discriminatory for insurance companies and employers to pay a smaller amount of long-term disability benefits to people who are receiving CPP-D payments.
The Human Rights Tribunal’s Decision
The Human Rights Tribunal did not accept that insurance companies are discriminating against CPP-D beneficiaries. The Tribunal concluded that private insurance long-term disability policies guarantee that beneficiaries will have a certain amount of their income replaced every month, but not that the insurance company will be the sole source of that income replacement. Since the combined income of people getting private insurance without CPP-D deductions is the same as the income of people getting private insurance with CPP-D deductions, the Tribunal concluded there was no discrimination.
To read the Tribunal’s decision, click here: https://www.canlii.org/en/on/onhrt/doc/2019/2019hrto101/2019hrto101.pdf
The Income Security Advocacy Centre continues to be concerned that CPP-D benefits do not allow many beneficiaries to escape poverty. Indeed, 22% of CPP-D beneficiaries are low-income, as compared to 15% of all Canadians aged 18-64. Deducting CPP-D from long-term disability benefits contributes to the financial hardship faced by persons with disabilities.
Whether or not Mr. Reilly decides to try to challenge the Tribunal’s decision in court, the Income Security Advocacy Centre will continue the fight with persons with disabilities to achieve economic justice.