Many Canadian seniors may not be receiving the Canada Pension Plan benefits that they are entitled to, according to a report released Monday.
The report by Canada’s Association for the Fifty-Plus (CARP) says complicated forms, convoluted jargon, and missing records prevented one in six seniors from receiving the full CPP benefits.
The report was prepared for CARP by The Retirement Planning Institute (RPI). CARP says more than $1.3 million have been recovered in unpaid CPP benefits by RPI over the past four years, and it warns that estimated shortfall could be as much as $1 billion owed to Canadians who are eligible for CPP.
Between October 2000 and September 2004, RPI completed 4,061 CPP audits at the request of recipients. The error rate was one in six. Retroactive payments averaged about $2,800 per account correction, varying from a few dollars to more than $20,000 in seven cases — one as high as $55,000.
About 90% of errors were due to improperly completed applications — or failure to complete an application at all. The majority of these errors related to incomplete disclosure about the Child Rearing Dropout (CRDO) Provision in the application form. This provision allows periods of time that a person can leave the workforce to raise children to be considered in order to improve benefits.
CARP says of the 488 “QPP only” audits, RPI did not uncovered a single error. It notes that Family Allowance records for children born prior to 1992 were destroyed in 1999 for all provinces with the exception of Quebec. This is often required for verification for the CRDO.
CARP’s recommendations include:
- Simplification of the application process & form;
- Incorporation of the CRDO application within the body of all CPP applications;
- Training of government staff to assist in the completion of applications;
- Development of a verification process to ensure that applications are complete;
- Strategy to compensate for missing Family Allowance records; and
- Consultation with seniors regarding reform of the process.