CPP and the dangling carrot.

I received a phone call this week from a clergyman - let's call him Cameron. Cameron had just turned 60. He could no longer work as a clergyman a position he had held for 30 years or more due to multiple disabilities both physical and mental. Cameron had applied for CPP disability at 59. He was denied because the Feds said whilst they recognise that he has limitations he was still suitable for some type of work. No surprise this is the standard denial vernacular.

So why I am calling this the dangling carrot......

The Feds go on to say and I am paraphrasing, well you cannot have your disability benefit but, because you will be turning 60 in whatever length of time that is - or if you are already 60 - we are delighted to advise you that you can collect you CPP early retirement benefits. Just sign here, withdraw the disability application, and there you have it we will put you on these benefits and just forget the CPP disability. We will even recognise the date of your appliation to CPP early retirement benefits as if that is the date you applied for early retirement benefits (note I am being a tad sarcastic).

This is the dangling carrot......

The CPP early retirement benefit payment is significantly lower that what you would collect on a CPP disability benefit - so the Feds have saved themselves a lot of money. It is my opinion that the Feds are also playing on people's emotions and desperation of the fear and financial implications of not having a monthly income. In Cameron's case I have seen the medical reports and the doctors have all supported that he is not capable of doing any work quite clearly.

I have seen this situation occur over and over again. Most people understand what the dangling carrot is - and the smart people of Canada are on to it.

I would also like to make note of one more thing. I have seen a lot of write ups lately from financial planners talking about taking early retirement from CPP. It is their perogative to give financial information but I get frustrated that not one of the financial planners mention that if you take early retirment one of the implications is the window of eligibility to access CPP disability benefits. I have talked at great length about this in previous blog entries.

I would like to thank everyone who contacts me about the blog. I am happy that the information it contains is helpful. Have a good week. Allison