Canada Pension Plan Disability Program

Opening Statement to the Standing Committee on Public Accounts

Canada Pension Plan Disability Program

(Report 6—2015 Fall Reports of the Auditor General of Canada)

21 April 2016

Michael Ferguson, CPA, CA
FCA (New Brunswick)
Auditor General of Canada

Mr. Chair, thank you for this opportunity to discuss our 2015 Fall Report on the Canada Pension Plan Disability program. Joining me at the table is Glenn Wheeler, Principal who was responsible for the audit.

The Canada Pension Plan Disability, or CPPD, program is the largest public benefit program for long-term disability in Canada. The CPPD benefit provides partial earnings replacement to someone who has made sufficient contributions to the Canada Pension Plan and who cannot work because of a severe and prolonged disability. Beneficiaries have a range of physical or mental disabilities. In 2013, almost 60 percent of beneficiaries were between 55 and 64 years old.

Employment and Social Development Canada is responsible for delivering the CPPD program. The Department reviews applications and determines whether applicants are eligible. If denied, applicants may ask the Department to reconsider decisions. Applicants who still disagree with the Department’s decision after their applications are reconsidered may file an appeal with the Social Security Tribunal of Canada. The Tribunal is independent from the Department and started operating on the first of April in 2013.

We examined whether the Department assessed applications for the CPPD benefit in a consistent and timely manner. We also examined whether the Tribunal decided CPPD appeals in a timely manner.

Let me turn first to Employment and Social Development Canada. We found that the Department met its service standards for assessing initial and reconsideration applications for disability benefits. However, it did not respect its guidelines for making faster decisions for applicants with terminal illnesses or grave conditions.

We also found that a high proportion of decisions were overturned at the reconsideration and appeal stages. In the 2014–15 fiscal year, 35 percent of initial decisions were overturned by the Department at the reconsideration stage, and a further 67 percent of appeals were overturned by the Tribunal—or by the Department before the Tribunal decided the appeals. The Department did not have a quality assurance framework in place. Consequently, it did not have assurance that its medical adjudicators made appropriate and consistent decisions. As well, the Department did not analyze the Tribunal’s appeal decisions to determine why the Tribunal had overturned the Department’s decisions.

Furthermore, we found that the initial application for benefits was lengthy and complex, requiring the completion of many forms. Department officials stated that the application kit, totalling 42 pages, could take applicants several months to complete. Since March 2012, the Department has made available to terminally ill applicants a condensed 11-page application.

Let me turn now to the Social Security Tribunal of Canada. We found that the Tribunal did not decide appeals in a timely manner. This was partly because of Employment and Social Development Canada’s poor transition planning before the Tribunal was established. Once established, the Tribunal was not ready to handle the inherited backlog of 6,585 CPPD appeals. It did not have the people, systems, or procedures in place to deal with its workload. For example, the Tribunal expected to start operating with 96 employees, but had only 21 in place when it opened.

The Tribunal was created to increase the speed and efficiency of the appeals process. However, we found that the number of CPPD appeals in the backlog was higher than it was before the Tribunal was established. In the 2014–15 fiscal year, as backlog issues worsened with the addition of new appeals, the average time it took to decide an appeal exceeded 800 days. This was more than twice the average time it took three years before.

To help reduce the backlog, Employment and Social Development Canada further reviewed the files of some appellants who were waiting for a decision from the Tribunal. The Department determined that about a third of the appellants were in fact eligible for the benefit, meaning that eligible applicants could have been approved sooner.

Canadians who have contributed to the Canada Pension Plan and cannot work because of a severe and prolonged disability may have to rely on the CPPD program as a source of income. For this reason, we believe the program needs to be improved, so that it is designed in a way that best serves applicants—from the initial application to the awarding of decisions.

Employment and Social Development Canada and the Social Security Tribunal of Canada have agreed with our recommendations and have committed to take actions to implement them.

Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the Committee may have. Thank you.