You continue to accumulate pensionable service while you are on Leave Without Pay (LWOP) FOR DISABILITY. Your coverage is automatic for the first three months. You then have an option to stop paying, and buy back that time later. For most people, it is better to just keep paying your pension ontributions (at the single rate) and the employer will pay their share. More years of service means more pension. You then have an option of paying it all at once, or spreading out your payments and having them deducted from your pay. If you are not returning to work, you may find it difficult to pay back the pension contributions right away. Once again go through your HR and request a longer repayment schedule due to financial hardship.
Later in this tip we look at return to work, accommodation of your dsability, and the impact of choosing retirement.
When a contributor ceases to be employed or dies, any unpaid pension contributions may be paid in a lump sum or recovered from benefits payable to the contributor, dependants, beneficiary or estate.
Sometimes, when you feel sick and frustrated, it is tempting to just retire. Before you take that step, look into your rights. Some key Supreme Court decisions have opened up a lot more opportunities for you. See Duty to Accommodate.
The main point is – do not let anyone rush you into a decision that will affect the rest of your life! Your employer may want to get you off their books, especially if they’ve hired a replacement. You can file a grievance to challenge any unreasonable attempt to release you, and the union will represent you at the grievance hearings.
On the other hand, your age, medical condition, financial and personal factors could mean retiring is what is best for you. If you qualify for DI, you may also be in a position to retire and draw your pension. The DI plan pays 70% of your current adjusted gross salary after a waiting period of thirteen (13) weeks or after the end of your paid sick leave and injury on duty leave (whichever is later). This will continue to age 65.
The amount of the Public Service pension benefit (reduced in part by CPP/QPP disability pension benefits as both plans are integrated) due to you will be deducted from your DI benefits paid by Sun Life, which will make up your income to the said 70% of salary. The good thing is that pension increases due to indexation are not being deducted.
If you retire on account of disability you can benefit from a significant feature of the Public Service pension plan. It provides for an unreduced pension at any age, after at least two years of pensionable service.
Remember, an unreduced pension is not the same as a full pension. If you put in 35 years, you get the maximum (full) pension. An unreduced pension means that you don’t get a penalty for early retirement. Your pension will still be based on years of service if you leave due to disability.
Also, continuing to receive DI benefits from the insurer (Sun Life) does not make you automatically eligible for immediate unreduced Public Service pension benefits. The procedure of applying for and receiving Disability Insurance benefits from the insurer is separate from applying for a Public Service pension benefit on account of disability.
An application for an immediate unreduced Public Service pension benefit on medical grounds is made through your HR office. You will be required to submit appropriate medical documentation which will be reviewed privately by a medical officer from Health Canada, who will put in writing whether you meet the definition of disability under the pension plan. If you meet the definition, you get an unreduced pension.
Disabled for the purposes of the Public Service pension plan can have quite a different meaning from total disability for the purposes of the DI plan. One does not automatically mean the other. In either case, medical documentation is key.
If you have less than 2 years of pensionable service, you have no pension benefit options other than a return of pension contributions plus interest.
If you are released by the employer:
Even after two or more years of absence from the workplace, you may wish to continue to maintain your leave without pay status and retain some sense of attachment with the federal public service. Unfortunately, the experience of the PSAC to date has been that after two years on leave without pay due to disability, federal departments and agencies will resort to forcibly terminating your employment through release for incapacity.
Such actions raise issues of human rights and should be discussed with your union. See question 13 for information on the possible consequences to your pension and other benefit entitlements if you are released for incapacity in comparison to the options of retaining leave without pay status or voluntarily retiring on medical grounds.
If you are on leave of absence due to disability and are approached about possible termination options, contact your PSAC representative to ensure the protection of your rights and entitlements. If you are ultimately released for incapacity or accept a medical retirement pension under duress, file a grievance, as well as a complaint against the employer with the Canadian Human Rights Commission.
- If you’re too sick to work, you should be getting benefits.
- If you’re well enough to work, you should be supported in returning to a job within your medical limitations.
However complicated the various claims and processes get, work with your union rep and stick to those principles.