Deductibility of CPP Benefits From A Loss of Future Income Award

Posted by Michael Brooker, Q.C. on 2 April 2014

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In a 2009 Nova Scotia Supreme Court decision (McKeough v Miller, (2009) NSSC 394), the Supreme Court determined that CPP benefits were deductible from an award for future loss  of incomeunder the Nova Scotia legislation.

In 2012,  the Ontario Court of Appeal  (Demers v Monty, (2012) ONCA 384),reversed its prior position regarding the deductibility of CPP benefits and determined that CPP disability benefits should not be deducted for two reasons. The first reason was that "clear and unambiguous legislative language is required to change common law rights," and Bill 59 did not explicitly state that CPP benefits were to be deducted. The second reason was that CPP benefits are not paid "in respect of the incident" itself, rather they are paid because of the disability.

Of particular interest was the fact that the Ontario Court of Appeal decision was based on statutory wording almost identical to the wording of the legislation in Nova Scotia that was considered in McKeough v Miller.

In September 2013, the Nova Scotia Supreme Court had occasion to consider the matter once again. In Sabean and Hallett v. Portage LaPrairie (2013 NSSC 306) , the sole issue for consideration was whether future CPP disability benefits payable to Sabean were deductible from an award of damages for loss of income under the SEF 44 endorsement. The Nova Scotia Supreme Court determined that they were not deductible . The decision was not appealed.  

Although the decision involved a consideration of the SEF 44 endorsement, it is probable that the rationale will be equally applicable in a consideration of a third party claim for damages for future loss of income. This is so as recovery under an SEF 44 endorsement is intended to be reduced by any amount that the insured person is eligible to receive from any other source yet CPP disability benefits were held to be not deductible.