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Pension Plan Issues with Progressive Disability

This information sheet is designed to provide general legal information only. It is not designed to provide specific legal advice and cannot be relied on as any definitive statement of the law. For information specific to your personal circumstances, please seek legal advice from a qualified lawyer.

 

Is this information sheet for me?

This information sheet discusses the federal Canadian Pension Plan (CPP) issues that commonly arise for people with Parkinson’s disease or other progressive disabilities. It also touches on related issues in British Columbia disability assistance legislation generally. The laws in other jurisdictions may be different.  

There are three main types of pension plans:  

  1. the Canadian Pension Plan;  
  2. public sector pension plans (for example, BC Municipal Pension Plan or the Federal Public Service Pension Plan); and,  
  3. private pension plans administered by your employer.

Most people who work in Canada contribute to the CPP and are eligible for a CPP retirement pension. This information sheet discusses CPP issues.  

You may also have a pension plan with your employer either in the public or private sector. Those pension plans will have their own rules. Please contact your employer’s pension administrator for information about what your options may be under that plan as well.

 

What CPP Benefit is best for you?

After being diagnosed with a progressive disease like Parkinson’s disease, there are certain factors that you should be aware of when planning what CPP benefit to apply for and when.

If you are under 65 years of age, you have three options:  

  1. apply for Canadian Pension Plan (CPP) disability benefits;  
  2. elect to receive an early CPP retirement pension; or,  
  3. wait until you are eligible for your full CPP retirement pension at age 65.  

A person can only receive the CPP retirement pension or the CPP disability benefit. You cannot receive both at the same time.  

If you are 65 years of age or older and have contributed to CPP, you are entitled to a CPP retirement pension. 

 

Early Canada Pension Plan Payments

If you are between the ages of 60 to 65, you may apply to receive an early CPP retirement pension. As long as you have made sufficient contributions, you can choose this option. However, the decision to take an early CPP retirement pension is a final decision. You cannot change your mind. The amount you will receive each month will remain less than what you would receive if you wait until age 65 to start your CPP pension payments. 

You are eligible to receive your full CPP retirement pension when you turn 65 years old. After you turn 60, you may also apply for an early retirement pension. If you choose to receive pension benefits early, CPP reduces your pension amount by a set percentage for each month that you before age 65, calculated from the time you begin receiving your pension.

Example:

If you took your CPP pension at age 60 in 2020 (60 months before age 65), the reduction is 0.6% per month (7.2% per year), for a maximum reduction of 36%.

The reduction in your CPP benefits is permanent if you take your CPP benefits early. You will continue to receive the reduced amount after you turn 65 years old.

If you are in your early 60’s, you may want to seek legal and/or financial advice about what option is best for you. 

 

Canadian Pension Plan Disability Benefits

The Canada Pension Plan also provides disability benefits in some circumstances. If the symptoms of Parkinson’s disease are contributing to your decision to retire early, you should consider applying for CPP disability benefits instead of an early CPP retirement pension.

CPP disability benefits typically provide more income than an early CPP retirement pension. The monthly amount of the CPP disability benefit is based on the contributions you made to the Canada Pension Plan prior to your application.  

One of the key advantages of CPP disability benefits is the amount you receive is not reduced because of your age. When you turn 65, the CPP disability benefit will be replaced with a CPP retirement pension. This means that you will typically receive more money each month if you receive the CPP disability benefit than if you opt for an early CPP retirement pension. However, in order to be eligible for CPP disability benefits, you are required to prove that your medical condition prevents you from performing any paid work. This can be a hard test for someone with a progressive disability to meet. Often the decision to retire is made when your condition has affected your ability to work but you are not yet at the stage where you are unable to perform any paid work.  

To qualify for the CPP disability benefit, you must:

  • be under 65 years of age,
  • meet the minimum qualifying period, and,
  • have a severe and prolonged disability as defined in the CPP legislation. 

 

What is the Minimum Qualifying Period for CPP Disability Benefits?

The minimum qualifying period means that you must have worked and contributed to the CPP for a certain number of years immediately before you became disabled. To meet the minimum contributory requirements, you must:

  1. Have made valid contributions to the CPP in 4 of the last 6 years, or
  2. Have contributed for at least 25 years, including 3 of the last 6 years. 

 

A Note on Late Applications

Sometimes people do not apply for their CPP disability benefits soon after they become disabled. In that case, you must apply outside of the minimum qualifying period under the late applicant provision. You will have to demonstrate that you met the minimum contributory requirements at the time of your disability and that you have been disabled ever since your last minimum qualifying period.

Example #1:

Mark is in his mid 50’s. He has worked for more than 25 years and contributed to CPP his whole career. He will need to have contributed to CPP in three of the last six years to meet the minimum qualifying period.  

If Mark started work in 1990, leaves work in 2015, and applies for CPP disability benefits in 2025, he would have to show he has been disabled and unable to work since 2018. That is, he last contributed in 2013, 2014 and 2015 (three years) but not 2016, 2017 and 2018. 2013 to 2018 is the six-year window for his minimum qualifying period. 

Example #2: 

Bridget is in her early 40’s. She immigrated to Canada later in life. She started working (and contributing to CPP) in 2000. If she worked until 2008, 2010 would have been the last year in which she qualified to apply for CPP disability benefits (the four out of the last six years rule means in the six years between 2005 and 2010, Bridget worked in 2005, 2006, 2007 and 2008 (four years) but not 2009 and 2010). If Bridget applied in 2020, she would have to show that she has been disabled and unable to work since 2010.

The minimum qualifying period means that you must have worked and contributed to the CPP for a certain number of years immediately before you became disabled. 

 

What is a “Severe and Prolonged Disability”?

In order to be eligible for CPP disability benefits, a person must have a severe and prolonged mental or physical disability.  You must provide a medical report filled out by a medical practitioner as part of your application to prove that your disability is severe and prolonged.

Many conditions will result in a “severe and prolonged” disability. What do these terms mean, in practice?

Severe: A disability is severe when you are “incapable regularly of pursuing any substantially gainful occupation.” This can be difficult to prove, particularly when you are suffering from a progressive disease. If you are able to do paid work, even if it is not your regular job, your application will be denied.

Prolonged: A disability is prolonged when it is “likely to be long-term and of indefinite duration or is likely to result in death.” While science is getting close, there currently is no cure for Parkinson’s disease. If your Parkinson’s disease is severe enough to prevent you from doing any paid work, you can likely establish that your condition is prolonged as well.

Example: Exploring Options over Time

Allen is diagnosed with Parkinson’s disease at age 59 and has paid into the Canada Pension Plan all his working life. At age 64, he has medical evidence he can perform no paid work because he has a severe and prolonged disability. These are Allen’s options at various ages leading up to retirement: 

CPP Example

Common Difficulties: 

CPP says I’m not “Disabled” according to the Plan

To be eligible for the CPP disability benefit you have to prove your condition meets the definition of disability under the Plan. This can be difficult for someone with a progressive disease to meet because you must prove that you cannot do any type of substantially gainful occupation. Although your symptoms are affecting your job, your condition may not yet at the point where you cannot do any work.  

Example: Applying Too Early for CPP Disability Benefits:

Parwinder wanted to stop working full-time because she found her Parkinson’s symptoms made working difficult. She applied for CPP disability benefits to supplement her income while she worked part-time. Her application was denied. CPP concluded that Parwinder’s medical condition did not meet the definition of ‘disability’ in the legislation: she was still able to work when she applied.

If you have a private pension plan through your employer, the definition of “disabled” may be different and easier to meet than the definition in the Canada Pension Plan. This is worth exploring with your employer’s pension administrator. 

I am already receiving an early CPP retirement pension but now I’m disabled 

The decision to elect to receive an early CPP retirement pension is generally one you cannot change.  

There is one critical exception: you can apply to convert your CPP retirement pension into CPP disability benefits within the first 15 months of receiving the retirement pension payments. However, you must show that you were disabled for the purpose of the CPP at the time you first elected to receive the CPP retirement pension. This can be difficult to do if you do not have detailed medical records from that time.

Example:  

Ana was diagnosed with Parkinson’s disease at age 51. Fortunately, she was doing very well for many years. At age 60, Ana decided to take an early CPP pension. She was very disabled at this time but did not know she may be eligible for CPP disability benefits which would give her more money each month. Later that year, Ana learned she could apply to convert her retirement pension into CPP disability benefits if she had enough medical evidence from the time she first received her pension benefits and if she acted quickly. 

CPP Example2

What to do if your application for CPP Disability Benefits is denied

If your application for CPP disability benefits is denied, you may have the decision reviewed. It is beyond the scope of this information sheet to discuss what the grounds for review are applicable in any specific case. You will need to show that CPP has not applied the legislation correctly or has misunderstood your medical evidence in refusing your application.  

Generally, you may only appeal the decision to court after you have exhausted all three of the CPP internal appeal processes. The CPP internal appeal processes are:

  1. Submit a request for reconsideration of a decision to Service Canada within 90 days of receiving your initial decision;
  2. If you are unsuccessful, submit an appeal to the General Division (first level of appeal) of the Social Security Tribunal of Canada; and
  3. If you are unsuccessful, submit a permission to appeal to the Appeal Division (second level of appeal) of the Social Security Tribunal of Canada.

Each stage has strict timelines that can rarely be extended:

  • The request for reconsideration must be made within 90 days of receiving the decision that your application was denied.  
  • If you are unsuccessful, you can appeal to the General Division of the Social Security Tribunal of Canada within 90 days of the reconsideration decision.  
  • If you are not successful at the General Division, you have 90 days to apply for permission to appeal to the Appeal Division of the Social Security Tribunal of Canada.  
  • If you are also unsuccessful at the Appeal Division, you may apply to the Federal Court for judicial review of the decision within 30 days.

Generally, on a judicial review, the Court considers the material you put before the CPP, whether the CPP officials followed the legislation properly and whether the process met general legal principles of fairness. The most typical remedy a Court will grant on a judicial review is to require the CPP to reconsider your application. A judicial review application requires special expertise in administrative law. 

Please seek legal advice on how to frame your appeal early in the process to maximize your chances for success. If you wait until judicial review for legal advice, you may have lost the opportunity to improve your case. 

 

A note on other pension plans

If you work in the public sector, you may be eligible for a public sector retirement pension or a disability pension. These plans have different requirements than CPP. You should ask your pension plan provider for more information. 

If you work in the private sector, you may have a private pension plan. The Pension Benefits Standards Act (BC) requires these plans to provide disability pensions if a plan member has a disability that is likely to considerably shorten his or her life expectancy. Each plan is different and the definition of disability in your plan may be easier to meet than under the CPP. You should request more information from your employer’s pension plan administrator.

 

Other considerations: Provincial Disability Assistance Benefits

In British Columbia, the Ministry of Social Development and Poverty Reduction currently provides social benefits for people with disabilities. This is called the Person with Disabilities (PWD) benefit. If you qualify, you receive a monthly income and other benefits like low-cost transit passes or improved health and prescription drug coverage.  

To qualify for a PWD benefit, you must show that you have a severe mental or physical impairment that significantly restricts your ability to perform daily living activities (such that you need assistance) and this impairment is expected to last more than two years. You must also meet the financial eligibility requirements. Currently, if you are a single, couple, or family where one person has the PWD designation, you are financially eligible if your liquid assets do not exceed $100,000 (that is, your bank accounts, RRSP, or Tax Free Savings Account). If you are a couple or family where both adults have the PWD designation, you are financially eligible if both adults’ liquid assets do not exceed $200,000. Your home, vehicle, and other assets will be exempt from the qualifying limits (these are “exempt assets”). For more information on eligibility and asset limits, contact the Ministry of Social Development and Poverty Reduction.

The PWD benefit is a prescribed monthly amount. In 2025, you could get up to $1,483.50 for a single person to $2,548.50 for a couple where both have the PWD designation.

If you qualify, you receive a monthly income and other benefits like low-cost transit passes or improved health and prescription drug coverage. 

 

Helpful Resources

 

Prepared by Blake, Cassels & Graydon LLP. Last updated: October 8, 2025