How to Organize Your Finances When Your State of Health Prevents you From Working?

The first thing to do is to verify your protections, that is, the money you could receive in the event of disability, if you are no longer able to work. There are several types of protections that cover different types of disabilities, each with their own conditions. Each plan, contract, or program has its own definition of disability. It may be permanent or temporary, meaning it may last forever or only for a short time. In certain cases, you could also be able to continue working a little.

Insurance benefits or workplace pension plans

Do you have group insurance with your employer? If so, does it provide for disability insurance, also called salary insurance? Verify whether you could receive benefits.

If you are a member of your workplace pension plan, you could be entitled to a disability pension. Consult your plan administrator.

If you own a home or a condo and you pay a mortgage, do you have a loan insurance that covers your payments for you while you are unable to work?

Benefits and indemnities from the Gouvernement du Québec

The Gouvernement du Québec provides various coverage options depending on your situation:

Disability benefits under the Québec Pension Plan

If you are under age 65 and your medical condition is severe and permanent, you could receive a disability pension under the Québec Pension Plan (QPP). Severe and permanent means that your medical condition prevents you from doing any work on a full-time basis, forever. Your disability must be recognized by Retraite Québec's medical team, and you must also have contributed sufficiently to the QPP to be entitled.

The pension is basic income, which means that it would not replace your entire salary. To obtain an estimate of the amount you could receive if your application is accepted, consult your Statement of Participation under the QPP in My Account.

If you receive a disability pension, it will be added to the income on which you pay taxes. If you have dependent children under age 18, they could be entitled to a pension for a disabled contributor's child.

Other benefits and indemnities

You could receive amounts from other public agencies, based on your situation, but please note that receiving a disability pension under the QPP can have an impact on other benefits related to disability.

If your disability was caused by a work-related accident, you must contact the Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST). Please note that you cannot receive a disability pension under the QPP if you are entitled to an unreduced income replacement indemnity from the CNESST. However, you could receive a disability pension under the QPP if your indemnity from the CNESST is reduced or if you are no longer entitled to it. For more information on the impact of a disability pension on your indemnity, contact the CNESST .

If your disability was caused by a traffic accident, you must contact the Société de l'assurance automobile du Québec (SAAQ) . Special rules apply to the payment of your disability pension under the QPP and your indemnity from the SAAQ.

If your disability is related to a crime, verify whether measures from the Indemnisation des victimes d'actes criminels (IVAC)  program could help you. A disability pension under the QPP has no impact on an indemnity from the IVAC.

The Ministère de l'Emploi et de la Solidarité sociale (MESS) could reduce or cancel your benefits from the Social Assistance Program  or the Social Solidarity Program  if you receive a disability pension under the QPP. For more information, contact the MESS .

Review your plan

Now that we have covered the amounts you could receive to meet your needs while you are unable to work, let's take a look at what you need to plan for in the future.

Once you know your new sources of income, adjust your budget. Certain earnings are taxable, therefore they are added to the income on which you pay taxes, while certain other earnings are not. It is important to verify this.

If your disability exceeds two years, your insurance company could ask you to file an application for a disability pension under the QPP. In that case, depending on the date on which we deem you to be disabled, your insurance company may decrease or cancel your benefits. You could also need to repay them. Check with your insurance company to avoid any surprises.

Receiving a disability pension and a retirement pension

What will happen at age 60 if you are still receiving a disability pension under the QPP? The payment you receive under the QPP will change, but will not decrease. You will start receiving your retirement pension, which will replace a portion of your disability pension. Then, at age 65, you will no longer receive the disability pension, but your retirement pension will increase. You will receive 100% of your retirement pension. As of that age, you could receive the Old Age Security pension and possibly the Guaranteed Income Supplement (GIS), both from the government of Canada.