1) CPP Disability (CPP-D)
If you’re receiving (or applying for) CPP Disability:
Insurance payouts usually do NOT affect eligibility, but:
- Private long-term disability (LTD) often offsets CPP-D
- Example:
LTD pays $2,500/month
You get CPP-D $1,000/month
LTD reduces to $1,500
- Example:
This is a policy rule, not a government clawback.
Lump-sum critical illness or injury payments usually don’t affect CPP-D.
2) Old Age Security (OAS)
OAS is affected by taxable income, not by the source of money.
OAS clawback starts around:
- ~$90,000 individual income (2025–2026 range)
- Fully gone around $145k–$150k
So the key question:
Is the insurance payout taxable?
| Type of payout | Impact on OAS |
| Tax-free lump sum (most critical illness, personal injury settlements) | No impact |
| Taxable LTD payments | Counts as income → could trigger clawback |
| Employer-paid disability plan benefits | Usually taxable → affects OAS |
| Personally paid LTD premiums | Benefits often tax-fre |