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Pensions - Canada Pension Plan - Disability (2). Canada (Attorney General) v. Ibrahim
In Canada (Attorney General) v. Ibrahim (Fed CA, 2023) the Federal Court of Appeal considered a Crown JR of a decision by the Social Security Tribunal (Appeal Division) that upheld the respondent's eligibility for a CPP-disability pension.
The case is important insofar as it draws a distinction between 'occupation' and 'benevolent employment' - both of which are defined by the common law (ie. not by statute). Before this case, the assumption had been that any work-related income was income from an "occupation" and therefore - if it exceeded the firm "substantially gainful" financial threshold [under s.68.1(1) CPP Reg] - it defeated the related definition of "severe" [under CPP Act s.42(2)(a)(i)], and thus disentitlement ensued. Here, with the new 'benevolent employment' category, an applicant could notionally allocate any such 'benevolent' income to a 'non-occupation' category and thus avoid the heretofore-'automatic' operation of the "substantially gainful" financial threshold, yet still (if the facts otherwise allowed) meet the "severe" element ["incapable regularly of pursuing any substantially gainful occupation"].
The below quotes set out the court's extensive reasoning on this novel - and useful - point:[2] The respondent, Mr. Sabet Ibrahim, is a 65-year-old man who worked for many years as a pharmacist. In January 2010, he stopped working due to chronic back pain caused by a car accident. He applied for a CPP disability pension. The Minister of Employment and Social Development [Minister] agreed that Mr. Ibrahim had a severe disability and was entitled to benefits. A disability is “severe” if it renders a person “incapable regularly of pursuing any substantially gainful occupation” (subparagraph 42(2)(a)(i) of the CPP).
[3] In 2020, the Minister terminated Mr. Ibrahim’s disability pension as of July 2016. Mr. Ibrahim’s medical condition had not improved. He continued to have functional limitations affecting his ability to work but from July 2016 had been paid to work as a part-time consultant in his son’s business. In 2016, 2017, and 2018, Mr. Ibrahim earned amounts that were over the “substantially gainful” threshold in subsection 68.1(1) of the Canada Pension Plan Regulations, C.R.C., c. 385 [Regulations].
[4] The Minister determined that, because of these earnings, Mr. Ibrahim’s disability was no longer “severe” as of July 2016 and $30,438.88 of disability pension amounts had been overpaid. Mr. Ibrahim requested a reconsideration of the cessation of benefits, which the Minister denied. The SST General Division dismissed Mr. Ibrahim’s appeal: 2022 SST 1238.
[5] The Appeal Division of the SST overturned the General Division’s decision. The Appeal Division concluded that the General Division had erred in law by failing to adequately consider whether Mr. Ibrahim was benevolently employed and not in a “substantially gainful occupation”, notwithstanding his earnings.
[6] The Appeal Division made the decision that it determined the General Division should have made, concluding that Mr. Ibrahim was engaged in benevolent employment and not an “occupation”. Accordingly, despite “substantially gainful” earnings, Mr. Ibrahim continued to have a “severe” disability and was entitled to a disability pension.
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II. Relevant Statutory Provisions
[9] In order to qualify for a CPP disability pension, an individual must have a disability that is both “severe” and “prolonged” (CPP, paragraph 42(2)(a)). The sole issue considered by the Appeal Division was whether Mr. Ibrahim’s disability continued to be “severe” as of July 2016.
[10] Paragraph 42(2)(a) of the CPP provides:42(2) For the purposes of this Act,
42(2) Pour l’application de la présente loi :
(a) a person shall be considered to be disabled only if he is determined in prescribed manner to have a severe and prolonged mental or physical disability, and for the purposes of this paragraph,
(a) une personne n’est considérée comme invalide que si elle est déclarée, de la manière prescrite, atteinte d’une invalidité physique ou mentale grave et prolongée, et pour l’application du présent alinéa :
(i) a disability is severe only if by reason thereof the person in respect of whom the determination is made is incapable regularly of pursuing any substantially gainful occupation, and
(i) une invalidité n’est grave que si elle rend la personne à laquelle se rapporte la déclaration régulièrement incapable de détenir une occupation véritablement rémunératrice,
(ii) a disability is prolonged only if it is determined in prescribed manner that the disability is likely to be long continued and of indefinite duration or is likely to result in death;
(ii) une invalidité n’est prolongée que si elle est déclarée, de la manière prescrite, devoir vraisemblablement durer pendant une période longue, continue et indéfinie ou devoir entraîner vraisemblablement le décès; [11] Subsection 68.1(1) of the Regulations provides:68.1 (1) For the purpose of subparagraph 42(2)(a)(i) of the Act, substantially gainful, in respect of an occupation, describes an occupation that provides a salary or wages equal to or greater than the maximum annual amount a person could receive as a disability pension. The amount is determined by the formula
68.1 (1) Pour l’application du sous-alinéa 42(2)a)(i) de la Loi, véritablement rémunératrice se dit d’une occupation qui procure un traitement ou un salaire égal ou supérieur à la somme annuelle maximale qu’une personne pourrait recevoir à titre de pension d’invalidité, calculée selon la formule suivante:
(A × B) + C
(A × B) + C
Where
où :
A is .25 × the Maximum Pensionable Earnings Average;
A représente 25 % du maximum moyen des gains ouvrant droit à pension;
B is .75; and
B 75 %;
C is the flat rate benefit, calculated as provided in subsection 56(2) of the Act, × 12.
C le montant de la prestation à taux uniforme, calculé conformément au paragraphe 56(2) de la Loi, multiplié par 12. ....
[17] At its core, the applicant’s position [SS: the Crown] is that the Appeal Division’s decision was unreasonable because it did not accept that “substantially gainful” earnings determined under subsection 68.1(1) of the Regulations were dispositive of whether Mr. Ibrahim was “incapable regularly of pursuing any substantially gainful occupation.” ...
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B. The Concept of “Benevolent Employment”
[21] Before reviewing the Appeal Division decision, I address the concept of “benevolent employment”. The term does not appear in the CPP or the Regulations but features prominently in the Appeal Division’s decision and the submissions made in this Court.
[22] The term was in the Canada Pension Plan Adjudication Framework [Framework], a document issued by the Department of Employment and Social Development to provide CPP decision-makers with the factors and legal principles required to adjudicate disability pension applications. The Framework was on the Government of Canada website at the time of the SST hearings. The hearings proceeded on the basis that the concept of “benevolent employment” could apply to Mr. Ibrahim, although the parties disagreed on whether it did.
[23] The Framework stated that in determining capacity for work, there may be rare circumstances where an individual receives earnings from employment, but because they are working for a “benevolent employer”, their performance and productivity may be limited or non-existent. The document explained that even though such an individual may work regular hours and earn income in excess of “substantially gainful” amounts, the individual could still be considered to have a “severe” disability because they are “incapable” of working in a competitive workforce.
[24] The Framework defined “benevolent employer”:A “benevolent employer” is someone who will vary the conditions of the job and modify their expectations of the employee, in keeping with her or his limitations. The demands of the job may vary, the main difference being that the performance, output or product expected from the [employee], are considerably less than the usual performance output or product expected from other employees. This reduced ability to perform at a competitive level is accepted by the “benevolent” employer and the [employee] is incapable regularly of pursuing any work in a competitive workforce.
Work for a benevolent employer is not considered to be an “occupation” for the purposes of eligibility or continuing eligibility for a CPP disability benefit. ....
[26] The Appeal Division determined that the General Division had erred in law within the scope of subsection 58(1) of the Department of Economic and Social Development Act, S.C. 2005, c. 34 [DESDA] in failing to fully consider whether Mr. Ibrahim’s employment in his son’s business was benevolent and, accordingly, whether he had a “substantially gainful occupation”.
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[30] Subsection 68.1(1) of the Regulations provides that “substantially gainful, in respect of an occupation, describes an occupation that provides a salary or wages equal to or greater than” a prescribed amount [emphasis added]. The Appeal Division reviewed the text and purpose of that provision, and considered the extrinsic aids submitted by the Minister.
[31] The Appeal Division accepted that subsection 68.1(1) provides a benchmark dollar amount and that its purpose was to ensure consistency on what counts as “substantially gainful” amounts (Reasons at paras. 80-85).
[32] However, the Appeal Division did not accept that this earnings threshold was determinative of whether an individual remains “incapable regularly of pursuing any substantially gainful occupation” or, in the words of the Appeal Division, “trump[s] other aspects of the test for a severe disability” (Reasons at para. 86).
....
[39] The Appeal Division elaborated. A person can be incapable regularly of pursuing any substantially gainful occupation and still have a friend or family member who creates a “job” for them or pays them more than the market requires for their work (Reasons at para. 95). The earnings are “not really from an occupation” (Reasons at para. 94). Just like an inheritance and investment income (which also improve an individual’s financial situation), benevolent employment “doesn’t tell us anything about a claimant’s capacity for pursuing any substantially gainful occupation” (Reasons at para. 95).
[40] The applicant says that it was unreasonable for the Appeal Division to depart from the “plain meaning” of an “occupation”, which they submit means work that is done for money. I disagree.
[41] While the term “occupation” may be open to various interpretations, I find that it was reasonable for the Appeal Division to conclude that an “occupation”, in the context of subparagraph 42(2)(a)(i) of the CPP, does not include benevolent employment (i.e., employment arrangements that do not truly measure capacity to work).
....
[55] Having determined that the General Division had erred, the Appeal Division made various findings of fact, described below, as permitted under subsection 64(1) of the DESDA. These findings of fact are not disputed by the applicant.
[56] When Mr. Ibrahim’s son became an authorized dealer for a cellphone company in 2011, Mr. Ibrahim provided advice without pay. In 2016, when Mr. Ibrahim’s income became insufficient to pay his bills, he was “hired” to work in his son’s business. He was paid a salary. His son employed him out of a sense of obligation, rather than due to a need for his services. The job was created for Mr. Ibrahim. His son stopped drawing a salary in 2017 to ensure there was sufficient operational cash to pay his father.
[57] Mr. Ibrahim worked “from the couch”, providing advice to his son on bookkeeping, human resources (resume review), and inventory management. He did some light paperwork, organizing mail and receipts. The precise number of hours worked is unclear. The Appeal Division determined that Mr. Ibrahim had testified that he could work 2-3 hours per day, but found that the hours varied based on his pain. The salary paid did not depend on the hours worked, but rather on the amount necessary to pay Mr. Ibrahim’s bills.
[58] Based on these findings, the Appeal Division concluded that Mr. Ibrahim’s employment was benevolent, and not an “occupation”. His working arrangement was not “anything like a job in the competitive workforce” (Reasons at para. 60). Mr. Ibrahim was salaried and worked when he was able. The job was tailored to his disabilities and there were no performance reviews. Accordingly, despite “substantially gainful” earnings, Mr. Ibrahim was not engaged in a “substantially gainful occupation”. . Smith v. Canada (Attorney General)
In Smith v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered a s.15 Charter challenge to the 11-month limit on retroactive (prior to application) CPP 'disabled contributor’s child benefits' (DCCB):[6] Subsection 74(2) of the CPP provides for the payment of the DCCB for a period of time prior to the application being made. However, subsection 74(2) of the CPP limits the retroactive payment of benefits to the 11-month period prior to the application being received. Mrs. Hume Smith therefore did not receive retroactive payment of the DCCB for each child commencing with the month after the month in which that child was born but rather only received retroactive payments for each child for the 11-month period preceding the month in which her application for these benefits was received. This limitation on the retroactive payment of DCCB to the 11 months preceding the application for these benefits is referred to herein as “the retroactivity cap”. . Bhamra v. Canada (Attorney General)
In Bhamra v. Canada (Attorney General) (Fed CA, 2023) the Federal Court of Appeal considered it's appellate role in the CPP-disability appeal route, which bears sketching by sequence as it is so procedurally extensive and complex:A. Administrative application for CPP Disability Pension [decided by the Minister of Employment and Social Development] [under CPP Act, s.56,60]
B. Appeal to the General Division of the Social Security Tribunal [Department of Employment and Social Development Act (DESDA), s.52(1)]
C. Leave to Appeal to the Appeal Division of the Social Security Tribunal [on a statutory reasonable standard, though it's still called an appeal] [under DESDA s.55-56]
D. Appeal (of the leave refusal) to the Federal Court
E. Further Appeal (of the leave refusal) to the Federal Court of Appeal [Federal Courts Act, s.28(1)(g.1)] . Pinkerton v. Canada (Employment and Social Development)
In Pinkerton v. Canada (Employment and Social Development) (Fed CA, 2022) the Federal Court of Appeal dismissed a judicial review of a decision of the Appeal Division of the Social Security Tribunal. The case doesn't have any key legal points but it is useful to see the CPP appeal procedures walked through.
. Brown v. Canada (Attorney General)
In Brown v. Canada (Attorney General) (Fed CA, 2022) the Federal Court of Appeal set out the basics of CPP disability eligibility:[9] To qualify for a CPP disability pension, the applicant must satisfy three criteria: (1) meet the contributory requirements; (2) be found disabled within the meaning set out in the CPP; and (3) continue to be disabled (Granovsky v. Canada (Minister of Employment and Immigration), 2000 SCC 28, [2000] 1 S.C.R. 703 at para. 10).
[10] Subsection 42(2) of the CPP sets out that a claimant is disabled if they have a severe and prolonged mental or physical disability. A disability is severe if the person is "“incapable regularly of pursuing any substantially gainful occupation”" and is prolonged if it is "“likely to be long continued and of indefinite duration or is likely to result in death”" (subparagraphs 42(2)(a)(i) and (ii)). The definition of "“severe”" in the CPP has been further interpreted by this Court in Villani v. Canada (Attorney General), 2001 FCA 248, 275 N.R. 324 [Villani]. It applied a large and liberal interpretation of the definition of "“severe”" in the CPP, given the benefits-conferring purpose of the CPP, and tried to resolve any ambiguity in favour of the claimant (Villani at paras. 28 and 29). This Court applied what it termed a "“real world approach”" to the application of the severity requirement, such that the applicant’s age, skills level, life experience, past work, education and language proficiency, should be taken into account when deciding whether the claimant is able to find "“substantially gainful occupation”" (Villani at paras. 31, 32 and 38).
[11] This Court has added a requirement that a claimant make efforts to treat their disability, where this is possible, and to seek employment that accommodates their limitations. This principle was first outlined in Lalonde v. Canada (Minister of Human Resources Development), 2002 FCA 211, 299 N.R. 229 at paragraph 19 as follows:The ‘real world’ context also means that the Board must consider whether Ms. Lalonde’s refusal to undergo physiotherapy treatment is unreasonable and what impact that refusal might have on Ms. Lalonde’s disability status should the refusal be considered unreasonable. [12] It was further applied in Kambo v. Canada (Minister of Human Resources Development), 2005 FCA 353, 344 N.R. 140; Klabouch v. Canada (Attorney General), 2008 FCA 33, 372 N.R. 385; Sharma v. Canada (Attorney General), 2018 FCA 48, 288 A.C.W.S. (3d) 790; and in Cvetkovski v. Canada (Attorney General), 2017 FC 193, 275 A.C.W.S. (3d) 658. . Walls v. Canada (Attorney General)
In Walls v. Canada (Attorney General) (Fed CA, 2022) the Federal Court of Appeal considered statutory provisions that allow for retroactive-dating of CPP-D applications on incapacity:[34] In Danielson, the majority of this Court held that the activities of a claimant during the period of incapacity in question may be relevant to cast light on their continuous incapacity to form or express the requisite intention and ought to be considered (Danielson at para. 7). In allowing the application for judicial review, Justice Létourneau, writing for the majority, found that "“[w]hat the Board should have looked at is whether these events at the time they occurred evidenced a capacity to form or express an intention to make an application for benefits.”" Rather, the Board omitted to do that and erroneously considered other relevant activities of the respondent. This misapplied the legal test (Danielson at para. 11).
[35] Additionally, in Sedrak v. Canada (Social Development), 2008 FCA 86, 377 N.R. 216, [Sedrak] this Court held that the "“capacity to form the intention to apply for benefits is not different in kind from the capacity to form an intention with respect to other choices which present themselves to an applicant.”" (Sedrak at para. 3). Rather, "“[t]he fact that a particular choice may not suggest itself to an applicant because of his world view does not indicate a lack of capacity to do so … Nothing in this scheme requires us to give to the word “capacity”’ a meaning other than its ordinary meaning.”" (Sedrak at paras. 3-4).
[36] Thus, the case law informs us that the applicable legal test is not whether the applicant has the capacity to make, prepare, process, or complete an application for disability benefits. That is, it does not depend on whether the applicant has the physical capacity to complete the application. Rather, it is whether the applicant has the mental capacity, quite simply, of forming or expressing an intention to make an application. This capacity is the same as forming or expressing an intention to do other things.
[37] The recent decision of this Court in Blue provides a helpful reiteration of the test in Danielson. In Blue, unlike in the present case, the applicant had psychological evidence that supported a finding of incapacity. The legal test for incapacity was restated in Blue at paragraph 42 and bears repeating:[42] From this, it appears that the test for incapacity for the purposes of subsection 60(9) of the Canada Pension Plan involves consideration of the following matters, at a minimum:
(1) The applicant’s evidence with respect to the nature and extent of his or her physical and/or mental limitations;
(2) Any medical, psychological or other evidence adduced by an applicant in support of their claim of incapacity;
(3) Evidence of other activities in which an applicant may have been engaged during the relevant period; and
(4) The extent to which these other activities cast light on the capacity of the applicant to form or express an intention to apply for disability benefits during that period. [38] I cannot agree with Mr. Walls’ submissions that the General Division failed to consider the elements set out in the fourth factor in Blue, the extent to which these other activities (in his case, "“inactivities”") cast light on his capacity to form or express an intention to apply for disability benefits. It was reasonable for the Appeal Division to find that the General Division had considered these "“inactivities”" as set out in paragraph 32 of the AD Decision. Mr. Walls does not agree with the weight given by the General Division to his list of pursuits and actions that he was no longer able to perform during the relevant period of November 2011 to November 2018. However, it is not our role, nor was it the role of the Appeal Division, to reconsider and re-weigh the evidence. The General Division did consider this list of "“inactivities”" at paragraphs 17 and 18 of its reasons. As stated in paragraph 33 above, it was reasonable for the Appeal Division to find that the General Division appropriately applied the legal test in Danielson to all of the evidence that was before it. These examples of "“inactivities”" simply did not convince or persuade the General Division of Mr. Wall’s mental incapacity. . Blue v. Canada (Attorney General)
In Blue v. Canada (Attorney General) (Fed CA, 2021) the Federal Court of Appeal considered an interesting case where the General Division of the Social Security Tribunal granted a CPP-D applicant's request for a retroactive start date (here over 10 years retroactive). The Appeal Division of the Social Security Tribunal reversed that, and a further appeal by the applicant was allowed at the Federal Court of Appeal:[36] It is the responsibility of the General Division of the Social Security Tribunal to assess the facts, and then, taking the relevant legal principles into account, to determine on the basis of its findings whether the test for disability – or, as in this case, the test for incapacity – has been met: Hillier v. Canada (Attorney General), 2020 FCA 11, 315 A.C.W.S. (3d) 408 at para. 2.
[37] The powers of the Appeal Division are more restricted. In accordance with subsection 58(1) of the Department of Employment and Social Development Act, S.C. 2005, c. 34, the Appeal Division may only intervene in a decision of the General Division in one of three situations:(1) Where the General Division failed to observe a principle of natural justice or otherwise acted beyond or refused to exercise its jurisdiction;
(2) Where it erred in law in making its decision; or
(3) Where it based its decision on an erroneous finding of fact made in a perverse or capricious manner or without regard for the material before it. [38] In this case, the Appeal Division found that the General Division had erred in law by applying the wrong legal test for incapacity. I do not agree. It was the Appeal Division that erred by interpreting this Court’s decision in Sedrak to mean that an individual who has the capacity to carry out some activities necessarily has the capacity to form or express the intention to apply for disability benefits.
[39] It is true that in Sedrak, this Court stated that "“[t]he capacity to form the intention to apply for benefits is not different in kind from the capacity to form an intention with respect to other choices which present themselves to an applicant”": at para. 3. It does not however follow from this that the ability of an individual to carry out certain activities necessarily means that they have the capacity to form or express an intention to apply for disability benefits.
[40] This was made clear in Canada (Attorney General) v. Danielson, 2008 FCA 78, 165 A.C.W.S. (3d) 560 at para. 7. There, this Court stated that "“the activities of a claimant during [the relevant] period may be relevant to cast light on his or her continuous incapacity to form or express the requisite intention and ought to be considered”" [my emphasis].
[41] It is implicit in the Court’s use of the phrase "“may be relevant”" in Danielson that while some activities will be relevant to the question of capacity in certain cases, others will not. Indeed, the Court went on in Danielson to say that the Board had to consider "“whether these events at the time they occurred evidenced a capacity to form or express an intention to make an application for benefits”", above at para. 11. This analytical framework was subsequently adopted by this Court in Canada (Attorney General) v. Kirkland, 2008 FCA 144, 167 A.C.W.S. (3d) 417.
[42] From this, it appears that the test for incapacity for the purposes of subsection 60(9) of the Canada Pension Plan involves consideration of the following matters, at a minimum:(1) The applicant’s evidence with respect to the nature and extent of his or her physical and/or mental limitations;
(2) Any medical, psychological or other evidence adduced by an applicant in support of their claim of incapacity;
(3) Evidence of other activities in which an applicant may have been engaged during the relevant period; and
(4) The extent to which these other activities cast light on the capacity of the applicant to form or express an intention to apply for disability benefits during that period. [43] The General Division considered this last question at paragraphs 20 to 26 of its decision. After assessing the extent to which Ms. Blue’s ability to carry out normal life activities was indicative of her capacity to form or express an intention to apply for disability benefits in the years between 2004 and 2016, the General Division concluded that Ms. Blue had established that it was more likely than not that she lacked the capacity to do so.
[44] Based on the error noted earlier, the Appeal Division concluded its analysis after the third step. It simply assumed that because Ms. Blue had the capacity to carry out certain life activities, it necessarily followed that she had the requisite capacity to form or express an intention to apply for disability benefits. The Appeal Division did not consider whether Ms. Blue’s ability to carry out activities such as paying her bills or raising her daughter was in fact indicative of her capacity to formulate or express the intent to apply for a disability pension.
[45] Before concluding, it must be noted that this is a most unusual case. In many cases, the ability of an individual to carry on ordinary life activities may well be indicative of their capacity to formulate or express the intent to apply for a disability pension. However, in this case, Ms. Blue’s disability, while severe, is narrowly focussed, with both her trauma and her mental health issues arising out of or relating to engagement with hospitals, the medical profession and persons in authority.
[46] The General Division carefully considered the nature and focus of Ms. Blue’s disability, concluding that it precluded her from formulating or expressing the intent to apply for a disability pension during the relevant period. The General Division did not err in coming to this conclusion, particularly in light of Dr. Benn’s evidence with respect to the specific focus and paralyzing nature of Ms. Blue’s fears.
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