# SUN LIFE DISABILITY PAYMENT - Fed GOV age 60 - 65 ALLOWANCE



## Retiredguy (Jul 24, 2013)

Husband age 66 receives OAS and GIS and as such his Wife aged 60 is entitled to a government allowance.

She is severely disabled and receiving a monthly non taxable Long Term Disability amount from Sun Life. The money from the gov is not a pension but rather its an allowance she's entitled to because her husband receives OAS/GIS. If he wasn't eligible for GIS then she wouldn't be eligible for the allowance.

Will Sun Life deduct the allowance from her monthly disability payment?


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## Beaver101 (Nov 14, 2011)

^ Have you checked the employee's benefits booklet? Details should be there explaining about "integration/offset" of benefits.


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## Retiredguy (Jul 24, 2013)

Beaver101 said:


> ^ Have you checked the employee's benefits booklet? Details should be there explaining about "integration/offset" of benefits.


Yes I have, it does talk about CPP/disability, private pension plans....... but there is nothing about the "allowance". 

It is not a pension, it has nothing to do with her disability. She would be entitled to it because her husband gets OAS/GIS, and she is age 60-64.

Her LTD from Sun Life is not taxable. Therefore she has zero taxable income and the "allowance" is based on their combined income which is about 5000 per yr. (His CPP) (OAS/GIS is excluded as income from the income calc.).


Sun Life being Sun Life I'm sure would try and claw it. I'm searching for some decision which says they can't.


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## Beaver101 (Nov 14, 2011)

^


> Sun Life being Sun Life I'm sure would try and claw it. *I'm searching for some decision which says they can't.*


 ... if it is not stated in the employee booklet or better yet the group contract, then how can they claw it or where are you going to find documentation when there isn't any? And it appears the OAS/GIS spousal allowance is not even an* indirect *offset according to the list on this link,

http://www.benefitsconsultant.ca/group-benefits/long-term-disability-insurance.html



> *Indirect Offsets*
> 
> Benefits payable under an association or other group benefits program
> Any income under any job or business for profit excluding severance or vacation pay except under an approved rehabilitation program
> ...


An OAS/GIS is certainly not employment related. However, any CPP disability income is.


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## Retiredguy (Jul 24, 2013)

Beaver101 said:


> ^ ... if it is not stated in the employee booklet or better yet the group contract, then how can they claw it or where are you going to find documentation when there isn't any? And it appears the OAS/GIS spousal allowance is not even an* indirect *offset according to the list on this link,
> 
> http://www.benefitsconsultant.ca/group-benefits/long-term-disability-insurance.html
> 
> ...


Thanks for the link and comments. I've come up with some case law regarding LTD and what the insurance company can and cannot do. Unfortunately its not directly on point, that's what I'm hoping to find - so we have the answer if it becomes an issue. But again, thanks for the link and your comments. They are helpful.

Do you have some experience in this area?

EDIT - Further I just went to the link you provided and I see, the last line which continues to make me wonder.

Direct Offsets
Cover benefits payable under government-sponsored benefits programs including Canada Pension Plan (CPP)/Quebec Pension Plan (QPP), employee disability pension benefits and Worker’s Compensation benefits
In some cases benefits payable under an auto insurance plan are included as direct offsets
In these cases benefits payable under an LTD plan become second payer – the employee has to apply for CPP/QPP benefits as well as Worker’s Compensation if the disability is a result of a work accident
Any amount received by the employee by government sources is then used to reduce benefits payable under the LTD plan


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## Beaver101 (Nov 14, 2011)

^ Nope, no experience in this area other than I read my employee benefits booklet very closely. Thought I just provide whatever my interpretation is and provide my 1c help/contribution to this board. I'm not a consultant or an expert on anything. 

Just hang around here - someone with actual experience in this area might chime in. Best wishes,


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## Eclectic12 (Oct 20, 2010)

^^^^

Hopefully someone with experience will chime in ... posting in the "General Discussions" section instead of "General Financial Talk" or "Retirement" may cut down on the number that read it.


Cheers


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## Beaver101 (Nov 14, 2011)

*Retiredguy: * .... just tell cainvest (PM him if needs to) our super-mod where you would like this moved for more readership - Retirement section (1 section up) or General Financial Talk (way up there).

Eclectic12 - good tip as usual. :satellite:


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## OptsyEagle (Nov 29, 2009)

Here is a guide to a SunLife Group Insurance Plan:

https://www.sunlife.ca/static/canad...Brochures/GB_SunSolutions Guide_PDF5060_E.pdf

I cannot say if this plan is exactly like yours but perhaps you have a booklet or link that covers your wife's plan that looks like this. Anyway, on page 36 it outlines the offsets against their long term disability benefits, where it says that it will offset against:



> "any other government plans and worker's compensation benefits for the same or a subsequent disability"


Now I would read that to say that they are talking about a government "disability" benefit, NOT a government retirement benefit like OAS/GIS. Now that is just how I read it. I am sure a fancy talking SunLife lawyer could read it to say "any other government plans" and then say it should offset against a government plan like OAS/GIS.

It also says that her income from these sources should not be more then 85% of her "net income" before the disability. 

Anyway, I suspect it will not offset against the OAS/GIS. I believe what SunLife is trying to do is protect themselves against her having too much "disability insurance" so they offset against all known coverage's like CPP disability and worker's compensation. Since they cannot know what NEW disability benefits some vote hungry politician might come up with in the future, they put in a clause like "any other government plans and worker's compensation benefits for the same or a subsequent disability" to protect them from being put in this position. You would be amazed the difference in claims experience an insurance company has as a person's coverage rises from 0% to over 100% of work income. After about 85% the claims experience gets downright ugly and that is what they are trying to prevent.

With these offsets they ensure that she will always be able to earn more money working then she would by being disabled. That is all they are trying to do. I would think they would be satisfied here and would most likely know about the OAS/GIS dependant benefit and if they were concerned about it, they would mention it directly.

In the end, they will be the ones making the decision so I suspect you will need to make a call to them.


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## Toronto.gal (Jan 8, 2010)

Retiredguy said:


> 1. The money from the gov is not a pension but rather its an allowance she's entitled to
> 2. the last line which continues to make me wonder....Any amount received by the employee by government sources is then used to reduce benefits payable under the LTD plan


*1.* I tried to find an answer here, but didn't see any direct reference. 
http://www.servicecanada.gc.ca/eng/services/pensions/oas/allowance.shtml

*2.* My understanding is that the offsettings are done to reduce the disability benefit from other income replacing sources like CPP or another disability insurance under another plan, which the 'Allowance' does not appear to be considered as such.

I know the booklet/policy wording is not always clear and unambiguous, but insurers have to follow regulations, so why not just ask them directly? 

You mentioned that your friend is receiving the benefit, and that it has not become an issue, hence not reduced, so why are you concerned?


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## Retiredguy (Jul 24, 2013)

Toronto.gal said:


> *1.* I tried to find an answer here, but didn't see any direct reference.
> http://www.servicecanada.gc.ca/eng/services/pensions/oas/allowance.shtml
> 
> *2.* My understanding is that the offsettings are done to reduce the disability benefit from other income replacing sources like CPP or another disability insurance under another plan, which the 'Allowance' does not appear to be considered as such.
> ...



For clarity, I'm trying to assist my brother and his wife. He is getting OAS/GIS. She is getting LTD and only just turned 60 in the past couple of months, making her eligible for the allowance. She has not applied for the "allowance" yet . In fact presently she is so medically (incapacitated), that I have made inquiries about how we can make the application. 

This is made all the more difficult because my brother does not have a computer/internet, is in a different city than me and is having to read me the docs over the phone. Her medical situation became very dire and I got more involved and learned more about their poor financial situation etc.

As his OAS/GIS situation triggers her eligibility for the allowance I don't want to do anything which will upset the LTD apple cart. Sun Life cannot force him to apply and also SL cannot penalize her for not applying because he also signs the allowance application (Its based on their combined income). So I'm left having to figure out if it would be a positive benefit or of no net benefit, and if the latter, why bother.

Your suggestion to ask SL directly is of course a good one and I likely will.


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## Toronto.gal (Jan 8, 2010)

If you haven't phonet yet, just ask whether any offsets apply to the gov. Allowance, but it would seem that it does not, and the logic [if correct] would be because the purpose of social assistance is not to provide a disability income benefit, rather, support for low-income individuals, so the 'Allowance' is not compensation for any loss of income.



Retiredguy said:


> I just went to the link you provided and I see, *the last line which continues to make me wonder.*


I should have clarified yesterday that the last line from the link Beav provided, is part of the 3rd point:

'In these cases benefits payable under an LTD plan become second payer – the employee has to apply for CPP/QPP benefits as well as Worker’s Compensation if the disability is a result of a work accident
Any amount received by the employee by government sources is then used to reduce benefits payable under the LTD plan.' *The 'gov. sources' refer to the above mentioned, not additional ones IMO.
*

- *Indirect Offsets* - those listed don't apply in this case [but are there more?].

- *All Source Maximum* - per the description, refers to the direct/indirect offsets, not benefits from additional sources ['benefit payable, direct offsets, indirect offset'].


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## fraser (May 15, 2010)

Why not simply phone Sun Life??

They have a toll free number. Have you plan number/employee number handy.


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## Toronto.gal (Jan 8, 2010)

Why repeat same suggestion a 3rd time?? OP has already indicated he would do so.


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## Beaver101 (Nov 14, 2011)

^ I think the OP would be better to "email" SL (if he hasn't called yet on the "general" enquiry) with authority from brother/sis-in-law so it's definitive confirmation of the OAS/GIS allowance not being used as an offset.


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## Toronto.gal (Jan 8, 2010)

Just thought of the claim form where questions are asked.

Click on LTD statement for disability - go to #8 under 'Your other income', and you'll see that the 'Allowance' is not listed. Anyway, now you have enough information to get it confirmed by SL either way.
https://cdn.sunlife.com/static/cana...mber_(Non-SunAdvantage)_Package_E_enabled.pdf


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## Retiredguy (Jul 24, 2013)

Toronto.gal said:


> Just thought of the claim form where questions are asked.
> 
> Click on LTD statement for disability - go to #8 under 'Your other income', and you'll see that the 'Allowance' is not listed. Anyway, now you have enough information to get it confirmed by SL either way.
> https://cdn.sunlife.com/static/cana...mber_(Non-SunAdvantage)_Package_E_enabled.pdf


Thanks everyone for your contributions. No definitive answer yet . If I get one I'll post here. Thought I would end with a bit of a chuckle.

I asked a highly referred lawyer who specializes in LTD benefits cases, and invites questions via their website. The response was ...... "It depends on the terms of the policy. There is in every policy an "offset" provision which sets out what SL is allowed to claw back."


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## Beaver101 (Nov 14, 2011)

^


> I asked a highly referred *lawyer who specializes in LTD benefits cases*, and invites questions via their website. The response was ...... "It depends on the terms of the policy. There is in every policy an "offset" provision which sets out what SL is allowed to claw back."


...thanks for the chuckle ... and now with that joke - how many lawyers do you need to screw in a lightbulb?


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