Disability Benefits in the Case of Terminal Illness Under a Public-Sector Pension Plan
Do you have a terminal illness which reduces your life expectancy to two years or less according to your physician? You could be entitled to disability benefits in the case of terminal illness.
Are you eligible for disability benefits in the case of terminal illness?
To apply for disability benefits in the case of terminal illness, you must meet the four following conditions:
- You are a member of one of the following plans:
- Government and Public Employees Retirement Plan (RREGOP);
- Pension Plan of Management Personnel (PPMP);
- Retirement Plan for Senior Officials (RPSO);
- Pension Plan of Peace Officers in Correctional Services (PPPOCS).
- A medical report indicates that you have a terminal illness that will probably lead to your death within the next two years.
- You are entitled to a deferred pension or a reduced immediate pension under your pension plan at the time you file your application.
- You have not retired.
If you are entitled to an unreduced immediate pension or a refund of contributions at the time you file your application, you cannot receive disability benefits in the case of terminal illness. However, you can apply for your retirement pension. To find out the eligibility requirements, consult the document explaining the main provisions of your pension plan.
You do not have to break your employment ties to receive disability benefits in the case of terminal illness.
Amount and payments
Disability benefits in the case of terminal illness are an amount you will receive once. The amount is equal to the highest of the following:
- the sum of the contributions you made to your pension plan, to which accrued interest is added;
- the actuarial value of the deferred pension or reduced immediate pension that you accrued under your pension plan on the date on which we receive your application.
If you have earned a pension credit, we will add the amount paid or transferred to obtain the credit, including accrued interest to your benefit.
You can receive your benefits by cheque or direct deposit, or you can transfer them to a registered retirement savings plan (RRSP) or a registered retirement income fund (RRIF).
Once you receive your benefits by cheque or direct deposit, the income tax deductions are made automatically.
If your benefits are transferred directly to an RRSP or a RRIF, no income tax deductions are made. As a result, when you will withdraw amounts from your RRSP or RRIF, the amounts will be taxable.
To apply for the transfer of your benefits to a RRSP or a RRIF, you must complete the Direct Transfer of a Single Amount Under Subsection 147(19) or Section 147.3 
form (T2151 form from the Canada Revenue Agency) and send it to us.
You maintain your employment ties
You can maintain your employment ties or continue to work even if you received the benefits. However, you can no longer be a member of your pension plan.
Your state of health improves and you continue to work
If your state of health improves two years after you received the benefits, you can choose to become a member of your pension plan once again. In that case, you must inform your employer.
When you die
By receiving the disability benefits in the case of terminal illness, you no longer have the rights or the advantages provided by your pension plan. As a result, your surviving spouse and your heirs may receive nothing from your pension plan when you die.
If you die before you receive your disability benefits in the case of terminal illness, your spouse could request for a cancellation of the benefits. Once they are cancelled, your family will be entitled to the survivors' benefits provided by your pension plan once again.
How to apply
To apply for disability benefits in the case of terminal illness, you must complete the Application for Disability Benefits in the Case of Terminal Illness (RSP-449) and send it to us online or mail it to us.
If you are mandated to complete the application for a person who is deemed able to do so, you must enclose a power of attorney or protection mandate with your application.
If a judgment authorizes you to complete the application for a person who is deemed unable to do so, you must send us either a protection mandate and proof of its confirmation, or the judgment authorizing you to represent this person.
Medical report
Complete and sign the first section of the Medical Report for Disability Benefits in the Case of Terminal Illness (RSP-448). You must have your physician complete the Physician's part. Your physician may ask you to pay a fee for producing the medical report. Send the report to us as soon as possible, or ask your physician to do so.
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