Disability income security programs are poorly coordinated

Canadian workers with disabilities face a patchwork of income security benefit programs – and many working-age disabled Canadians receive no income security benefits at all, according to a study by Institute for Work & Health researchers. Income security benefits provide financial support to those who cannot work.

Published: August 10, 2008

About five percent of working-age Canadians received disability benefits in 2001 totaling $13 billion. Among Canadians aged 55 to 64, one in 10 received a disability benefit. Plus the study found that about 386,000 working-age Canadians with a disability, who were not in the labour force, did not receive any income security benefits.

Disability benefits for Canadian workers aged 15-64 in 2001
  Canadian Pension Plan disability benefits Provincial social assistance plans Provincial workers’ compensation agencies1 Employment-based disability plans
Number of people receiving benefits 279,000 351,000 130,000 166,000
Rate of people receiving disability benefits (per 1,000 workers) 15.5 19.5 7.2 8.6
Amount paid $2.4 billion $3.4 billion $2.3 billion $4.4 billion
Average benefit amount (per year) $8,767 $9,796 $17,734 $26,900
1 Claimants receiving benefits for 12 weeks or longer

A Canadian who is disabled can receive benefits from a number of sources, including the Canadian Pension Plan Disability Benefit Program, a provincial social assistance plan, a workers’ compensation agency, or a disability plan through an employer.

However, each program has different rules to determine who is eligible. A person might be able to receive benefits with one program and not another. The amount received could vary greatly, depending on the plan.

Disability income security programs in Canada are poorly coordinated, benefit amounts differ substantially between programs, and there appears to be significant inconsistencies in program coverage, says Institute President Dr. Cameron Mustard, the lead author. There are benefit payers across federal and provincial jurisdictions. Unfortunately, there is no authority responsible for ensuring that income security programs and plans for disabled Canadian workers are coordinated.

Here’s an example of the differences in coverage. Three separate motor vehicle collisions result in identical spinal cord injuries to the three drivers. Each driver is permanently disabled as a result of these injuries:

  •     a male self-employed construction worker driving to his worksite
  •     a male insurance company manager with 10 years of employment tenure
  •     a male commercial truck driver.

What might happen to these workers’ income? The self-employed construction worker might receive disability benefits from his motor vehicle insurance plan or the Canada Pension Plan. The insurance company manager would likely be insured by an employment-based disability plan provided by a private insurance company. The truck driver would potentially collect workers’ compensation.

However, each program has different benefit provisions. Each worker’s income security benefits, as a proportion of their earnings before injury, will likely be different. The current system leads to inequities in access and in the benefit amounts received” notes Mustard.

The study is available on the Institute’s website as Working Paper #339:Disability Income Security Benefits for Working-Age Canadians (see www.iwh.on.ca/working-papers). These findings are based on two Statistics Canada surveys: the annual Survey of Labour and Income Dynamics (SLID) and the Participation and Activity Limitation Survey (PALS) in which Canadians with disabilities are interviewed every five years.

For more information about this research, please contact Dr. Cameron Mustard at cmustard@iwh.on.ca.