Disability payment program structures face constitutional challenge

A constitutional challenge over clawed-back disability payments is set to play out in court Tuesday on behalf of a Winnipeg man who has been trying to live on $257 a month.

Paul Hutlet, who is in his late 40s, is unable to work because of post-traumatic stress disorder, fibromyalgia and major depressive disorder. He qualified for Manitoba disability benefits, but had to pay the province back once his federal Canadian Pension Plan disability payments kicked in.

That kind of clawback happens in every province, but it must stop, argue Toronto lawyers Sujit Choudhry and David Baker.

They took on Hutlet’s file as a "test case" to try to persuade courts to allow Canadians with disabilities to stack their provincial and federal assistance payments.

The two-day hearing begins Tuesday morning at Manitoba’s Court of Queen’s Bench. The lawyers are seeking interim financial support for Hutlet, as well as a court declaration that Manitoba and the federal government are acting unconstitutionally by co-ordinating disability-payment programs in a way that leaves people with disabilities without enough money to meet basic needs.

"It’s a profoundly important test case, because Paul’s situation’s not unique," Choudhry said. "For people with disabilities, the clawing back of their CPPD benefits by provincial programs is a Canada-wide problem."

Choudhry said Hutlet qualified for provincial social assistance via Manitoba’s employment income assistance program, as well as supplemental provincial health coverage through the Income Assistance for Persons with Disabilities program.

But when Hutlet began receiving his CPP disability payments in 2019, his provincial benefits stopped and the province garnished his federal assistance income to pay back, dollar-for-dollar, the provincial assistance previously received.

Hutlet had signed a consent form allowing the province to recover costs if he was approved for a federal disability pension, but Choudhry said he paid into the pension plan when he was working and should be able to qualify for both programs.

The monthly payment Hutlet received via provincial assistance was $1,051; the monthly federal pension payment was about $1,175. When his provincial payments were clawed back, Hutlet paid $900 per month for rent and then had $257 a month to live on, his lawyer said.

Provincial clawbacks became common decades ago, when the federal government had a 50/50 cost-sharing agreement to fund provincial social assistance programs — it didn’t make sense for the feds to pay twice. However, that’s not the case anymore, and other types of federal assistance payments don’t trigger clawbacks.

There are 50 exemptions in Manitoba, but federal disability pensions aren’t one of them, Choudhry said.

Choudhry is set to argue in court the clawback practice is unconstitutional because it puts people who rely on disability payments below Canada’s poverty line. That threshold is roughly $24,000 a year in Manitoba, according to the Market Basket Measure.

"Systematically, the rights of the disabled are overlooked in the political process. Their interests are often overlooked in favour of more powerful groups, and that’s why we’ve been forced to go to court," the lawyer said.

katie.may@freepress.mb.ca