How government regulations affect people who fall through the cracks:

Isabel:
Isabel's husband Jim was a chauffer and contributed to CPP for a few years just before his retirement.

He retired in 1970. For whatever reason, he never applied for his CPP retirement benefits. In fact, HRDC continued to mail him his 'Statement of Contributions' telling him what his retirement benerfits would be when he turned 65.

They continued to mail the form until 1999 when he was apparently 96 years old - still telling him he could get CPP. I say apparently 96 because, in fact, he died in 1986. So 13 years after he died HRDC is still telling someone who appears to be 96 what CPP benefits he might get when he retires.

Finally, Isabel gets some help sorting through these papers and applies for the survivor benefits - she has been eligible for survivor benefits since 1986 - 15 years of bneeifts. - do we give them to her? No. The legislation provides for only 11 months of retroactive benefits - she has lost out on several thousand dollars.

Jim never received any benefits that were paid for by his CPP contributions.

Ramona (not her real name):
Ramona's husband Brian died just before she turned 65. So she went to the local office to apply for CPP.

Somehow, she applied only for survivor benefits (because her husband had died) but not for her retirement benefits.

Ten years later she returns to the department because she's missing some T4 slips. Just like other cases, she has learned that she missed out on thousands of dollars in benefits because the CPP legislations does not generally provide for retroactive benefits.

After an article in the Globe and Mail about this case, there were two developments. First, HRDC discovered that she never received the 11 months of retroactive benefits (do you need to know to ask even for this?). Second, HRDC decided that, in this case, they had made an Administrative Error and gave her full retroactive benefits.

Ernestine:
Ernestine's case is very much like Ramona's. She was not receiving her CPP retirement benefits. Her husband died and she started receiving CPP survivor benefits. When HRDC received her application for survivor benefits, they did not tell her about the retirement benefits that she was missing.

In 1977, at age 65, Ernestine applied for the Old Age Security (OAS), with a Social Insurance Number (SIN) in hand which indicated previous employment. Did HRDC counsel her that she might be eligible for CPP? No, Why? "According to experienced staff, who worked in the CSC in the eighties, it is reasonable to assume that Mrs. ... was not counselled, in regards to a retirement pensions as was normal procedures, due to her advanced age, at the time" (HRDC's words - not mine)

In 1988, she applied for survivors CPP pension when her husband died. She was not counselled then about her retirement pensions because she applied by mail and "There was no opportunity for ... staff to speak with her about potential entitlements." (HRDC words - not mine) Eventually, in 2000, she discovered that she should have been getting retirement benefits. A loss of about 24 years in benefits.

Ernestine did not receive any of the mailings to those eligible for CPP because of "computer glitches" (HRDC's words - not mine)

She initiated an appeal to HRDC's Review Tribunal of her case. Ernistine has now died and her son is pursuing the complaint.

HRDC decided that, in this case, they did not make an Administrative Error. The Review Tribunal is not allowed to find that HRDC made an Administrative Error. Only HRDC itself is allowed to find that it made an Administrative Error.

She never received her retroactive benefits.

Debbie:
The following letter was sent to Macleans after an article about CPP Retroactivity.

Dear Ms. Janigan,

I read with interest your article on unclaimed CPP payments. I have my own story about this. My mother died January 2nd 1971. This tragic event left my father in charge of three very young children, myself 11, a sister 7, and a brother 5. My father was only 29 years old at the time of my mother's death, and as happens in some families, my dad was left to fend for himself. Fortunatley, my father had a decent job as a truck driver, and somehow we managed to survive, although we endured bouts of hungry tummies, hand me downs that were either too big or too small, haircuts in the kitchen, and no post secondary education. My dad found out during a chance conversation in around 1995 that he was entitled to my mom's benefits. The funeral home did not notify my dad of this, and if they did, he certainly was in no shape to act on it at the time. He did everything the government asked him to do, and finally after more months of waiting they sent my dad his payments. Only, of course retroactive for less than a year. I feel that my father was more than entitled to the entire 25 years of payments, having been an honest, hardworking and loving father. We never collected welfare or handouts from anybody, and my father worked his hands to the bone to keep his family together after the death of his young wife. My dad was never unemployed, even when his health would dictate rest, he continued to work. My father died on Christmas Day 1999, and that money could have given him some consolation for having endured a lifetime of hardship and heartbreak. Having collected for only three years, when he struggled with us for many, enrages me. It infuriates me that we did without, and the government kept money from us that could have made all our lives more bearable, even though it ! would ne ver have brought my mother back. I say shame on the government. tsk tsk.

Thanks for your article

Debbie

Saul:
Saul is in his early 70's. In 1977 there was a car accident which put him in the hospital and killed his wife.

At age 65 Saul applied for CPP and discovered that there was a CPP Survivor benefit which he had been missing out of for 20 years.

Saul lost out on his benefits because of CPP legislation. He appealed to the HRDC review tribunal which upheld the federal position. He was told that he should have informed himself or been told by the funeral director.

Arlene:
Arlene is 67 and receives the Guaranteed Income Supplement; she discovered that withdrawing RRSP funds does not necessarily leave you with any money.

Usually, GIS is reduced by 50 cents for every 1 dollar removed from an RRSP; but the impact can vary. In some circumstances the GIS is not reduced by withdrawals from an RRSP. In others, you can lose 75 cents or even a full dollar for each dollar withdrawn from an RRSP.

Arlene is particularly unlucky in choosing when to cash out some RRSP money. She withdrew $1,000. At the end of the year she received a letter from HRDC stating
· First, that she owed them $500 because she got too much GIS last year.
· Second, that her GIS for the next year would also be reduced by $500.
In total, her GIS was being reduced by $1,000 because she withdrew $1,000 from an RRSP.

It doesn't stop there. Her total income was enough that she pays income tax (about half of GIS recipients pay income tax). So she paid, one would guess, a couple hundred dollars in income tax on the RRSP 'income'.

Will the RRSP withdrawal affect her provincial benefits (perhaps I don't know enough about her circumstances);
· if she is in social housing her rent will increase by about $300.
· Her deductible for prescription drugs could increase depending on which province she lives in.
· The cost of meals on wheels or home-care could increase.

Arlene still has $9,000 in her RRSP which she would like to use for an Alaskan cruise. Understandbly she is afraid to touch it.

How much does she get from these funds as she spends them?

Rosemarie:
AM has three children - adolescent boys aged 14, 15 and 16 whose father died in 1989.

She just recently discovered that the CPP program for survivor benefits included children. These benefits were paid for by the contributions of the boy's father.

She applied for the benefit but ran into the HRDC retroactivity limits… under the current legislation HRDC only pays retroactive benefits for 11 months (unless the department made an Administrative Error or the person was incapitated). I might have thought the department could have taken the position that the boys were not able to apply - being children and paid the full retroactive benefits.

So AM only got about 11 months of back payments for the boys - she took the funds, bought them a pair of shoes and put the rest in an education fund.

UNTILL - her welfare worker found out about this. Her next welfare cheques was reduced by the amounts received from CPP.

She was no further ahead…

LH:
LH is 82 years old, fled communist Hungary, lived in concentration camps and immigrated to Canada in 1951. He worked and was mostly self-employed for 35 years in Canada filing his own income taxes. Because of language and his employment circumstances he was 'culturally isolated'.

Prompted by a friend he made enquiries and discovered the CPP which has not been receiving. He missed out on CPP over the last 16 years because under the current legislation retroactive payments only go back 11 months.

One could take the attitude that CPP doesn't owe him anything more than 11 months, that it was his responsibility to inform himself about CPP. As well, he must have been getting forms from HRDC, his 'Statement of Contributions'. He clearly didn't understand them. In a better world, HRDC might have phoned him and pointed out that there were benefits to which he was entitled.

Richard Shillington
March, 2003

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