Canadian income security benefit programs are fragmented and disorganized and have resulted in disparate delivery of benefits to workers with disabilities, according to a study.
The Institute for Work & Health’s Disability Income Security Benefits for Working-Age Canadians report describes a patchwork of provincial, federal and private benefits programs which are uncoordinated and sometimes work at odds to one another.
“I don’t think it was by design, but over time we have created a system that imposes on people a very difficult administrative process,” says Cam Mustard, president of the Institute for Work & Health in Toronto, and author of the report. “The only reason it’s there is that we’ve allowed it to go this far.”
Canadian income disability security comes from four primary sources, according to Mustard: Canada Pension Plan (CPP) disability benefits, provincial social assistance, provincial workers compensation programs, and employment-based long-term disability (LTD) programs.
Described as a system with many different payers and no central administration, Canada’s disability income security system displays serious shortcomings which have resulted in a number of consequences. The most visible example, according to the report, is a massive bureaucracy involved in adjudicating and negotiating the eligibility of individual claimants, especially where the claimant may be eligible for benefits from more than one program.
The report illustrates a mock case where three separate motor vehicle collisions result in identical spinal injuries to the drivers, who are permanently disabled as a result. The first victim is a self-employed construction worker driving to the job site, the second is an insurance company manager with 10 years employment tenure, and the third is a commercial truck driver. While the injuries are indistinguishable, the disability benefits they qualify for vary greatly.
This is due in part, says Mustard, to the criteria required by the various sources of disability income security. Provincial workers compensation benefits are relatively easy to qualify for, with fewer than 5% of applicants being denied, while CPP has a denial rate closer to 30%, along with criteria that seem to work against private and provincial plans.
“The criteria that have been established to qualify for that benefit are quite stringent,” Mustard explains. “An applicant has to demonstrate that he or she will never work again, while it’s the perspective of provincial workers compensation plans and employment-based benefits that people will work again.”
Mustard advocates harmonization as the first step towards fixing the system and says that the CPP and LTD plans should use a common definition of the term disability as a first step.
“The great tragedy of this is that the last thing you want to do as a society is to bring a huge administrative challenge onto someone who is going through a very scary experience.”