If you have a prolonged and serious medical condition that prevents you from working, you may qualify for monthly payments through the Canada Pension Plan (CPP) Disability Benefits program. These benefits are taxable, and you must apply and meet the eligibility criteria in order to receive them.

Who Qualifies for CPP Disability Benefits?

There are different types of benefits, and in addition to meeting the medical requirements, there are other qualifications to consider before applying for the CPP Disability Benefits.

The CPP Disability Benefit

The eligibility requirements to receive this monthly payment are:

  • You must be under 65 years of age and not receiving CPP Retirement Benefits
  • You must have been an active contributor and contributed enough to the Canada Pension Plan
    • You must have been an active contributor to the CPP for at least 4 of the 6 years prior to your application and met the annual contribution threshold.
    • Alternatively, if you have been an active contributor to the CPP for 25 years or longer, your requirement is 3 out of the previous 6 years of your application.
  • You must have a mental or physical disability that regularly stops you from doing any type of substantially gainful work.
  • Your disability must be long-term and of indefinite duration, or is likely to result in death.

The CPP Post Retirement Disability Benefit

If you currently get the monthly CPP retirement pension, you could receive the Canada Pension Plan Post Retirement Disability Benefit if you:

  • Are aged 60 to 65 years old.
  • Have contributed enough to the CPP.
  • Have a mental or physical disability that regularly stops you from doing any type of substantially gainful work.
  • Have a disability that is long-term and of indefinite duration, or is likely to result in death.
  • Have been receiving the CPP retirement pension for more than 15 months or become disabled after starting to receive the retirement pension.

In some cases, there are exceptions to these eligibility requirements. For instance, if you were not working because you had children under the age of seven, you can still qualify for CPP Disability Benefits. Similarly, if you haven’t worked recently due to your disability but you delayed requesting benefits, you may also receive an exemption to the rule. Finally, if your spouse or common-law partner transferred CPP credits to you, or if you paid into a social security program in another country that has an agreement with Canada, you may also qualify.

See this Service Canada article for more information: Canada Pension Plan Disability Benefits: Do You Qualify?

When you turn 65 your CPP disability benefit is automatically changed to a CPP retirement pension.

How Do You Apply for CPP Disability Benefits?

You can apply for your CPP Disability Benefits online or by completing a paper form. You may download the kit from the Government of Canada’s website, visit a Service Canada Centre to get an application kit in person, or call Service Canada and request to have an application mailed to you.

There are two different application forms:

The application requires information about your medical condition and a medical report from your doctor. Service Canada will then perform a medical assessment. You also must provide details about your family and work history.

How Much Is the CPP Disability Benefit?

CPP disability benefits vary based on how much you have contributed to CPP and how long you have been contributing. If you have children, you may also receive extra benefits to help with their care. The amount of benefits changes to reflect the cost of living and current amounts can be found here.

How Do Benefits for Children Work?

If a child is under the age of 18 and his parent receives CPP Disability Benefits, a dependant child may qualify for the monthly children’s benefit. If both parents are disabled, the child may qualify for two benefit payments. If you have dependent children under age 18 and you qualify for CPP disability benefits, you should also apply for these benefits on behalf of your children.

Children between ages 18 and 25 may also qualify for this benefit, but only if they are full-time students at a recognized school or university. If your child falls into this category, you cannot apply for the benefits on their behalf. Instead, your children must request these benefits on their own and complete the Declaration of Attendance at School or University (ISP1401) form.

Are CPP Disability Benefits Taxable?

The Canada Revenue Agency (CRA) considers CPP benefits as taxable income. At the beginning of each year, you should receive a T4A(P) – Statement of Canada Pension Plan Benefits tax slip that shows the amount of CPP payments you received in the previous year. The slip categorizes the payments depending on whether they are disability benefits, children’s benefits, or another type of CPP benefits. You must report all of these amounts as income on Line 11400 – CPP or QPP Benefits of your tax return.

If You Live in Quebec

If you live in Quebec, you would not apply for the disability benefit under the Canada Pension Plan. You can apply for the Quebec Pension Plan Disability Benefit if one of the following applies to you:

  • you have worked only in the province of Quebec
  • you currently live in Quebec and have worked both in the province of Quebec and in another province or territory
  • you have worked in Quebec, currently live outside Canada and your last province of residence was Quebec

Is There Another Tax Credit for People With Disabilities?

Luckily, even though you have to report CPP disability benefits as taxable income, the CRA offers a number of tax credits that can help offset your income and lower your tax liability. The most common credit associated with persons receiving CPP Disability Benefits is the Disability Tax Credit or DTC.

The disability tax credit is a Non-Refundable Tax Credit for taxpayers who suffer from severe, prolonged disabilities. It is important to note that receiving CPP disability benefits does not automatically entitle a taxpayer to claim the disability amount. To claim the disability amount, Form T2201 – Disability Tax Credit Certificate must be completed and signed by an authorized medical practitioner and then approved by the Canada Revenue Agency.

What Edition of TurboTax Is Right for Me?

Answer a few simple questions on our product recommender and we can help guide you to the right edition that will reflect your individual circumstances.

You can always start your return in TurboTax Free, and if you feel the need for additional assistance, you can upgrade to any of our paid editions or get live help from an expert with our Assist & Review or Full Service*. But don’t worry, while using the online version of the software when you choose to upgrade, your information is instantly carried over so you can pick up right where you left off.

*TurboTax Live™ Full Service is not available in Quebec.

No matter your tax situation, we’ve got you covered.