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Reasons and decision
Overview
[1] The Respondent received the Appellant’s application for a Canada Pension Plan (CPP) disability pension on March 30, 2015. The Appellant claimed that she was disabled because of a car accident that caused back, neck, shoulder pain and headaches. The Respondent denied the application initially and upon reconsideration. The Appellant appealed the reconsideration decision to the Social Security Tribunal (Tribunal).
[2] To be eligible for a CPP disability pension, the Appellant must meet the requirements that are set out in the CPP. More specifically, the Appellant must be found disabled as defined in the CPP on or before the end of the minimum qualifying period (MQP). The calculation of the MQP is based on the Appellant’s contributions to the CPP. The Tribunal finds the Appellant’s MQP to be December 31, 2017.
[3] This appeal was heard by Teleconference for the following reasons:
- There are gaps in the information in the file and/or a need for clarification.
- The Appellant did not show up for the initial scheduled hearing due to some confusion about location. A teleconference will simplify the procedure and make it easier for the Appellant to appear.
[4] The following people attended the hearing: A. L., Appellant; Kevin Wylie, Barrister and Solicitor, Appellant’s Representative.
[5] The Tribunal has decided that the Appellant is not eligible for a CPP disability pension for the reasons set out below.
Preliminary issues
[6] The Appeal was to be heard by means of videoconference. Unfortunately at the date and time of the videoconference the Appellant through a misunderstanding appeared at the wrong location. Section 68 of the CPP Regulations was a possible issue at the hearing and the Tribunal gave the Appellant’s lawyer an opportunity to research the law and further was “directed to identify the source of payments to the Appellant since she last attended her workplace”. The Appellant’s representative concurred the rescheduled hearing could proceed by way of teleconference.
Evidence
[7] The Appellant was 51 years of age at the date of the hearing. She obtained a high school education and a certificate from X College qualifying her as Nursing Practical Care Aid.
[8] The Appellant’s employer is the City of Toronto and she worked full time as a Practical Nursing Care Aide at a care home service. She worked on modified duties since 2010 and then as a result of a further car accident stopped attending the workplace in February 2014. She now is paid Unadjusted Pensionable earnings by the employer’s long term disability insurer. The Appellant does not believe her employer ever terminated her employment and she has signed a waiver regarding deductions by the employer (OMERS disability waiver). She did not know whether her previous job was still available to her in the event of recovery. She testified that due to a number of medical issues she is unable to resume attending at her workplace.
Submissions
[9] The Appellant submitted that she qualifies for a disability pension because:
- Income derived from a long term disability insurance policy does not preclude the Appellant’s eligibility for a CPP disability pension. Applying the Villani framework receipt of LTD income is not derived from having a substantially gainful occupation. LTD income is not derived from “lucrative, remunerative paid employment.”
- The receipt of long term disability payments is not determinative of the severity requirements under section 42(2)(a)(i) of the Act. Villani defined occupation as temporary or permanent employment.
- Section 68.1 of the Regulation is not an income test and LTD payments are not to be included in a calculation in accordance with s. 68.1 of the Regulation.
- The CPP is a benefit conferring legislation and ought to be interpreted in a broad and generous manner and any doubt arising from the language ought to be resolved in favour of the claimant.
[10] The Respondent submitted that the Appellant does not qualify for a disability pension because:
- The Respondent did not make any submissions concerning the impact of s.68.1 of the Regulations on the Appellant’s application for a disability pension.
- The Respondent’s submissions were based on the Appellant not suffering from a severe and prolonged disability as defined in the CPP.
Analysis
Test for a disability pension
[11] The Appellant must prove on a balance of probabilities, or that it is more likely than not, that she was disabled as defined in the CPP on or before the end of the MQP.
[12] Paragraph 44(1)(b) of the CPP sets out the eligibility requirements for the CPP disability pension. To qualify for the disability pension, an applicant must:
- a) be under 65 years of age;
- b) not be in receipt of the CPP retirement pension;
- c) be disabled; and
- d) have made valid contributions to the CPP for not less than the MQP.
[13] Paragraph 42(2)(a) of the CPP defines disability as a physical or mental disability that is severe and prolonged. A person is considered to have a severe disability if he or she is incapable regularly of pursuing any substantially gainful occupation. A disability is prolonged if it is likely to be long continued and of indefinite duration or is likely to result in death.
Minimum qualifying period
[14] The Tribunal finds that the MQP is December 31, 2017.
Severe
SECTION 68.1 CANADA PENSION PLAN REGULATIONS
[15] Section 68.1 states for the purpose of subparagraph 42(2)(a)(i) of the Act, “substantially gainful”, in respect of an occupation, describes an occupation that provides a salary or wage equal to or greater than the maximum amount a person could receive as a disability pension.
[16] The Appellant had unadjusted pensionable earnings of $52,500.00 in 2014, $36,388.00 in 2015, and $36,300.00 in 2016. The Regulations contains a formula that results in the maximum disability pension for 2014 - $14,386.20; 2015 - $15,175.08; and 2016 - $15,489.72. There is no issue the Appellant receives amounts in excess of the maximum disability pension and continued to do so as the date of the hearing.
[17] The Appellant made CPP contributions of $2,425.50; $1,627.97 and $1,623.60 in 2014, 2015, and 2016 respectively.
[18] The calculation of earnings and contributions to CPP are not within the jurisdiction of the Social Security Tribunal. Record of Earnings and the Unadjusted Pensionable Earnings are calculated and recorded by Canada Revenue Agency. Any objection by the Appellant to the amount of the CPP contributions to the Record of Earnings or the classification of earnings is a matter of an appeal to the proper forum. Section 12 of the CPP states that the amount of the contributory salary and wages for a person for a year is the person’s income for the year from pensionable employment. Subsection 92(2) of the CPP states that the Minister of National Revenue has the control and directions of the administration of Part 1 which is the part concerning contributions and pensionable employment.
[19] The Tribunal in accordance with the CPP therefore must accept the calculation of the amount of contributory salary and wages of a person. In this case the calculation of the salary and wages received by the Appellant. The Income Tax Act determines wither the payment from the LTD insurer is salary or wages. The nature of the relationship between the employer, insurer and employee is determined by Canada Revenue Agency and in this case the determination was the Appellant is receiving salary and wages which constitute unadjusted pensionable earnings.
[20] The Appellant’s representative submitted that the Canada Pension Plan is considered a benefit-conferring legislation and the Supreme Court of Canada has decided the Plan should be construed liberally. In other words a broad and generous manner.
[21] The CPP is a self-funded contributory plan. CPP retirement benefits are universal but disability benefits are conditional. They are designed to assist persons with disabilities who were recently in the work force by replacing employment income with a disability pension. The CPP was designed to provide social insurance for Canadians who experience a loss of earnings owing to retirement, disability, or the death of a wage-earing spouse or parent. It is not a social welfare scheme. It is a contributory plan in which Parliament has defined both the benefits and terms of entitlement, including the level and duration on an applicant’s financial contribution (Granovsky v. Canada [2000] 1 S.C.R. 703). The Honourable Mr. Justice Binnie wrote concerning the requirements of the CPP as follows: “the Minister responds that if line drawing is to be done, as it is inevitable in a government benefits scheme, the question is not only where they are to be drawn, but also who is to draw them, the courts or Parliament? The Minister says the Parliament is the proper constitutional actor to make these policy determinations. This is true, provided the Parliament’s line drawing does not violate the Constitution”.
[22] There is no submission before the Tribunal that s.68.1 of the Regulations violates the Constitution.
[23] Parliament has enacted s.68.1 of the CPP Regulations which defines what amount of earnings constitutes substantial earnings. The Income Tax Act defines what constitutes earnings resulting in Unadjusted Pensionable Earnings which triggers contributions to the CPP in accordance with s. 12 of the CPP. Contributions to the CPP affect the Minimum Qualifying Period. Parliament has set out the contribution levels and qualifying periods required for eligibility for a disability pension. There is a difference between a liberal interpretation of the contributory requirements and the interpretation of “severe” in order to qualify for a benefit if the contributory pre-condition has been met. For example a liberal interpretation is not given to the MQP but has been given concerning severe and capacity to work. The Tribunal in considering the interpretation of severe has consistently rendered a liberal interpretation in accordance with the real world factors (Villani) and the jurisprudence concerning chronic pain (Martin case). The calculation of the MQP and the requirement of CPP contributions are not subject to a broad and liberal interpretation. CRA has determined the Appellant’s contributions and the contributions continue.
[24] The Supreme Court of Canada (Sarvanis v. Canada [2002] 1SCR 921) ruled the clear purpose of the CPP disability benefits is to supplement the income of disabled Canadians who have difficulty meeting day to day expenses because of their inability to work, that is, their status as disabled. For this reason, it has already been held by the Court that CPP disability payments are not to be considered indemnity payments. This rule is premised on the contractual or contributory nature of the CPP. Only contributions are eligible, at the outset, to receive benefits, provided that they then meet the requisite further conditions.
[25] The Supreme Court of Canada in the leading case of Rizzo held that words of the Act must be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. The language of the Act should be read in a broad manner in a fair, larger and liberal interpretation. This view is supported by s.12 of the Interpretation Act which states every enactment is deemed remedial, and shall be given a fair, large and liberal construction and interpretation as best ensures the attainment of its objects. The language in s.68.1 is very clear. The section defines what constitutes substantially gainful in respect of an occupation for the purposes of subparagraph 42(2)(a)(i) of the Act.
[26] Subparagraph 42(20(a)(i) states that a disability is severe only if by reason thereof the person in respect of whom the determination is made is incapable regularly of pursuing any “substantially gainful occupation”. S. 68.1 of the Regulations clearly states the amounts that constitute substantially gainful. The Appellant’s receipt of unadjusted pensionable earnings as determined by Canada Revenue Agency constitutes substantial earnings for the purpose of subparagraph 42(2)(a)(i) of the CPP.
[27] The Appellant’s Representative submitted that the Regulation should be given a liberal interpretation as the CPP is benefit giving legislation. The Tribunal asked the Representative to submit how the granting of a disability benefit would be of benefit to the Appellant. The submission was the legislation is benefit granting and should be interpreted liberally but no specific benefit to the Appellant was given by the Representative.
[28] In the facts of this case the Appellant would not receive a CPP pension that is of ultimate financial benefit to her. The amount she receives from the employer/insurer will be reduced by any amount she receives from CPP. In the ruling of Mr. Justice Binnie the purpose of the CPP was to provide social insurance to Canadians who experience a loss of earnings owing to disability. In this case the CPP disability benefit does not help the Appellant’s loss of income as she will receive a lower amount from her employer/insurer. The CPP is not a benefit giving legislation in the particular circumstances of the Appellant. Mr. Justice Binnie wrote that it is inevitable in a government benefits scheme lines will be drawn. In this case the government by Regulation determined the line to be drawn with regards to substantial earnings. The Appellant would be both a contributor to CPP and a recipient of CPP which is not the purpose of the Act as noted by Mr. Justice Binnie. There is not any hardship to the Appellant as her MQP date will be extended and her qualification for a disability pension is not jeopardized. In the event she does not receive unadjusted pensionable earnings in the future and therefore does not contribute to CPP she will be able to apply for CPP disability pension with an updated MQP. The Appellant’s future retirement pension increases due to her continued contributions to CPP. A granting of a CPP disability benefit negatively affects her future CPP retirement pension. The circumstances of this case results in a granting of a disability being of no benefit to the Appellant, and a detriment to her future possible CPP retirement pension.
[29] The result of a broad and liberal interpretation in situations such as the Appellant finds herself is to benefit the employer and the insurer of the employer, and detrimental to her. The financial obligation of the employer/insurer is mitigated by the granting of a disability pension to the Appellant. The Supreme Court of Canada stipulated that the clear purpose of the CPP disability benefit is to supplement the income of disabled Canadians who have difficulty meeting day to day expenses because of their inability to work. A liberal interpretation of s.68.1of the Regulations does nothing to advance the clear purpose of a disability pension in the circumstances of this Appellant. It may benefit the employer and its long term providers of disability insurance to the employee but does not advance the purpose of the CPP to supplement the income of the Appellant and her financial security.
[30] The Appellant has an occupation as a practical nursing care aid for a City of Toronto care home facility. The terms of her employment were to work full time and to fulfill all duties of her employment. Due to medical issues she was then required to work on modified duties to fulfill her obligations to the employer. When she could no longer attend and undertake modified duties she was relieved of her obligation to attend the workplace. The Appellant has not been terminated from that employment and has received waivers from the employer to reduce her obligation to make contributions to some of the benefit programs. She is unable to attend at work due to her injuries. In the circumstances of the Appellant under the terms of her employment receives disability benefits. This contractual arrangement has been determined by the Canada Revenue Agency to be earnings and subject to taxation and the mandatory contributions to the Canada Pension Plan. Although not physically attending the care facility she is receiving income (as determined by CRA) pursuant to the terms of the contract with her employer. The effect of the Regulations and determination of income by Canada Revenue Agency results in the Appellant receiving substantially gainful earnings. The occupation is substantially gainful and it is not relevant the amount of effort if any required by the Appellant to earn such income. It is the terms of her occupation.
[31] The definition of severe is the claimant is incapable regularly of pursuing any substantially gainful occupation. The Appellant receives substantially gainful earnings in accordance with the terms and conditions of her occupation. She is unable to attend work but her occupation entitles her to receipt of substantial earnings pursuant to her contract of employment. CRA has determined this meets the criteria of taxable income and therefore CPP contributions continue.
[32] Villani (Villani v. Canada (Attorney General) 2001 FCA 248) clarified the operative terms of the CPP legislation. Regularly was defined as “at regular intervals”; substantial as “having substance” not illusory of real importance or value, practical; gainful as “lucrative, remunerative paid employment. The Representative submitted her right to LTD income arises from a contractual entitlement as a result of disability. The Tribunal finds that her entitlement is twofold first due to her status as an employee of the City of Toronto as secondly inability to report to her place of employment to perform her regular duties. Each and every word in the definition of severity must be given due consideration. In order to meet the definition the Appellant must satisfy the entire definition not just part of the definition. The Appellant is receiving “substantial” earnings and the earnings are of value and not illusory. The Appellant is engaged in lucrative remunerative paid employment and pursuant to the terms of her employment she is in receipt of lucrative remunerative pay. She receives one rate of pay when she is able to attend work full time and a lower but still lucrative rate when she is unable to attend and receives payment from her employer’s insurer. The Tribunal finds it is not enough that she may meet part of the definition she must meet the entire definition of severe. The Appellant failed to prove on a balance of probabilities she is incapable regularly of pursuing “any substantially gainful occupation”.
Prolonged
[33] As the Tribunal found that the disability was not severe, it is not necessary to make a finding on the prolonged criterion.
Conclusion
[34] The appeal is dismissed.