Part 2: Canada Pension Plan Disability Benefits

On this page:

  • Contribuition Requirements
  • Minimum Qualifying Period
  • Record of Earnings

Contribution Requirements

The first thing that the Minister of Human Resources Development Canada considers when someone applies for any benefit under the Canada Pension Plan is whether that person has contributed enough to CPP to qualify for the benefit they are applying for. That is, the applicant must have contributed enough to CPP to meet either the minimum contribution requirements or the minimum qualifying period (MQP). [Section 44(1)(b)(i) states that a disability pension shall be paid to a contributor who has made contributions for not less than the minimum qualifying period.]

If an applicant for disability benefits has not contributed enough to CPP (i.e., they do not meet the MQP), then it does not matter how disabled that person is, he or she will not qualify for disability benefits. Determining whether someone has contributed enough to CPP is not easy. The rules are complicated, and they vary depending on when the applicant became disabled. This article is intended to provide advocates with a basic understanding of contribution requirements under the Canada Pension Plan and how they relate to disability benefits applicants.

The first step in determining whether someone has contributed enough to CPP is to calculate the applicant's contributory period. Everyone who contributes to the Canada Pension Plan has a contributory period. Section 44(2)(c) of the Canada Pension Plan Act states that the contributory period begins on January 1, 1966, or when the contributor reaches the age of 18 (whichever is later), and ends in the month that the contributor is deemed disabled under section 44(1)(b). We reviewed section 44(1)(b) briefly in the last issue of CLM.

To put this into context, if someone turned 18 before January 1, 1966, his or her contributory period still begins on January 1, 1966. The Canada Pension Plan did not exist before that date. Therefore, no contributions could have been made to CPP before January 1, 1966. If someone turned 18 after January 1, 1966, then their contributory period begins the year they turned 18. CPP does not collect any contributions before a person's 18th birthday.

Contributions are collected through an individual's employment or self-employment income. The contributory period ends in the month that the minister considers the applicant to have become disabled - using the CPP definition of disabled. Once you have determined what the applicant's contributory period is, you can determine whether he or she meets the minimum contributory requirements or the MQP.

The Minimum Qualifying Period

In the past, the minister would only calculate whether the applicant met the MQP at the time that he or she applied for disability benefits. In other words, the minister would assume that the person applied for CPP disability benefits immediately after becoming disabled, and would conclude that the contributory period ended on the date the person applied for benefits. But if the applicant waited to apply for disability benefits, the minister often found that he or she no longer had sufficient CPP contributions to meet the MQP.

Late applications In June 1992, the federal government introduced Bill C-57, which included a "late application" provision. The late application provision is now in section 44(1)(b)(ii) of the Canada Pension Plan Act. This section allows the minister to determine when the applicant last met the MQP in cases where the applicant does not apply for disability benefits right away. This allows applicants who do not apply immediately after becoming disabled (when they stop working) to have their applications considered if they can demonstrate that they were indeed disabled when they last met the MQP. Without section 44(1)(b)(ii), people who did not apply shortly after becoming disabled would not qualify for disability benefits because of insufficient CPP contributions.

The MQP tests There are three different contributory tests for CPP disability benefits, depending on when the applicant became disabled.

Between January 1, 1966 and December 31, 1986

If the applicant became disabled between January 1, 1966 and December 31, 1986, he or she must have made valid contributions to CPP:

  • in 5 out of the last 10 years of the contributory period; and
  • in either 1/3 of the entire contributory period or in 10 years.

The applicant must meet both of the above tests to fulfill the MQP. To determine a), calculate the last 10 years of the contributory period (the years immediately before the end of the contributory period). Within those 10 years, the applicant must have contributed to CPP in at least 5 years. To determine b), calculate the entire contributory period (from beginning to end). Count the total number of years in this period. Then determine the number of years that the applicant contributed to CPP during this period. Using these 2 figures, you should be able to determine whether the applicant made contributions in at least 10 years, or in at least 1/3 of the entire contributory period.

Example: John Smith applied for CPP disability benefits in August 1988. He claims that he became disabled in June 1984, when he was 42 years old. His Record of Earnings shows valid contributions to CPP for the following years: 1972, 1973, 1975, and 1979 - 1984. Has Mr. Smith contributed enough to CPP to qualify for disability benefits?

Answer: First, determine his contributory period. It starts in 1966, since his 18th birthday would have been before January 1, 1966. Assume that it ends in 1984, when he became disabled.

The first part of the test requires us to determine if he has made valid contributions in 5 out of the last 10 calendar years. He would have to have contributed to CPP for at least 5 years - from 1975 to 1984 (inclusive). Since Mr. Smith has 7 years of contributions between 1975 and 1984, he meets the first part of the test. However, he must also meet one of the two tests set out in paragraph b).

The second part of the test involves looking at the entire contributory period. He must have contributed to CPP for either 10 years in the entire contributory period OR in at least 1/3 of the years of the entire period. Since Mr. Smith has 9 years of contributions, he has contributed to CPP during at least 1/3 of the entire contributory period (9 years of contributions out of 19).

In fact, Mr. Smith will continue to meet the MQP until the end of 1986. Therefore, if the medical evidence does not support his claim that he became disabled in 1984, but it does support a conclusion that he became disabled sometime in 1986, he would still meet the MQP (since he would still have contributions in 5 out of the last 10 years of his contributory period, and in 1/3 of the total contributory period).

Between January 1, 1987 and December 31, 1997 If the applicant became disabled between January 1, 1987 and December 31, 1997, the applicant must have made valid contributions to CPP:

  • in 2 out of the last 3 years of the contributory period; or
  • in 5 out of the last 10 years of the contributory period.

This contribution test is much easier to meet than the pre-1987 test. In fact, an applicant only needs to meet one of the two tests.

Example: Using the previous example, does Mr. Smith qualify for disability benefits after December 31, 1986?

Answer: Yes. In fact, Mr. Smith will continue to meet the MQP until December 31, 1989. Mr. Smith has made valid contributions to CPP in 5 years between 1980 and 1989. In this case, count Mr. Smith's last five years of contributions: 1980, 1981, 1982, 1983, and 1984. In order to meet the 5 out of 10 test, determine the tenth year from 1980, which is 1989. The end of that calendar year is when Mr. Smith last meets the MQP.

In calculating when the applicant last meets the MQP, when the applicant claims to have become disabled is not necessarily important. All you need to do is determine when the applicant last contributed enough to CPP to actually qualify for benefits. In Mr. Smith's case, as long as you can find medical evidence that supports the conclusion that he was disabled (as defined by the legislation) before December 31, 1989, he will be eligible for disability benefits.

On or after January 1, 1998

If the applicant became disabled on or after January 1, 1998, he or she must have made valid contributions to the Plan:

  • in four of the last six years of the contributory period; or
  • in each year after the month in which the applicant stopped receiving a previous disability benefit.

This test, found in section 44(2)(a) of the act, is more difficult to meet than the pre-1998 test. An applicant who became disabled before January 1, 1998, and who had only contributed to CPP in two years could be eligible for disability benefits under the pre-1998 test, above. However, an applicant who became disabled on or after January 1, 1998 will have to have at least four years of contributions to receive disability benefits.

In addition, the pre-1998 test gives applicants an opportunity to meet one of two tests (a or b). The current test really only sets out one test (a). The applicant must have at least four years of contributions in the last six years of his or her contributory period or he or she will not qualify for benefits. The test in b) only applies in situations where a disability benefits recipient goes off the benefits, presumably to return to work, and then re-applies. Before January 1, 1998, applicants would have to meet one of the two pre-1998 contribution tests to re-qualify. They would have to have contributed to CPP for at least two years after returning to work to re-qualify for disability benefits.

Under the current test, the applicant must have contributed to CPP for each year after he or she stopped receiving previous disability benefits. This may make it easier for some people to re-qualify for the disability benefit, and more difficult for others.

The Record of Earnings

The Record of Earnings records all of an individual's contributions to the Canada Pension Plan. Referring to this document is the easiest way to determine when someone contributed to CPP.

The Record of Earnings Summary is set up as a table, and indicates the years in which the applicant made contributions to either the Canada Pension Plan or the Quebec Pension Plan. The table has five columns. The first column lists the years in which the individual contributed to CPP. It will never include any years before 1966, when CPP was introduced.

The second and third columns are labelled "CPP CONT" and "QPP CONT," respectively. These columns show the contributions the applicant made to either the Canada Pension Plan or the Quebec Pension Plan. The fourth column is labelled "UPE." UPE stands for "Unadjusted Pensionable Earnings," and shows the amount of the contributor's earnings from which contributions to CPP were calculated. The figures in the last column are administrative codes.

To determine whether the applicant has a valid contribution for any given year, look at the UPE column. Generally, if a number appears in that column, the applicant probably has a valid contribution for that year. If the UPE amount is indicated as "00000," then the applicant did not have sufficient earnings from which a CPP contribution could have been assessed, even if a number appears in either the CPP CONT or QPP CONT columns. Although it may appear that the applicant contributed to CPP in a year with no UPE earnings, that contribution was probably refunded on the applicant's tax return. Once you have identified all of the years that have valid contributions, you can determine if the applicant meets the relevant MQP test.