June 21, 2004
The New Brunswick government and the Blue Cross insurance company say they have the right to claw back federal benefits intended for the children of a disabled woman.
The province and Blue Cross filed a statement of defence Monday in the New Brunswick Court of Queen's Bench, saying they're not doing anything wrong by claiming monthly child disability benefits intended for the three children of Fredericton resident Sharon McKeen.
McKeen, 44, had to leave her provincial government job three years ago due to the debilitating effects of multiple sclerosis.
She and her husband, Randy, and their children are having a difficult time making ends meet due to the fact that a significant part of the family's income is being pocketed by Blue Cross, the administrator of a disability plan for New Brunswick government employees.
"In addition to the financial toll, the stress has had a devastating effect on my family and my health," Sharon McKeen said in an interview.
"I have been fighting this battle for almost two years. The provincial government and Blue Cross have either ignored me or tried to obstruct me at every turn."
Although the federal government does not believe the provinces have any right to the child benefits, several provinces have gone ahead with the clawback.
McKeen said she believes her lawsuit will be closely watched in other parts of Canada.
"I believe there are many other people in the same situation or worse," she said.
Under the Canada Pension Plan, disabled parents are entitled to special benefits to help them cover child-rearing costs they can no longer manage.
That meant the McKeens would get an extra $578.04 per month for their children.
When Blue Cross informed McKeen that the child benefit would be deducted from her monthly Blue Cross payment, she double-checked with federal officials.
They told McKeen that Blue Cross and the province have no right to claim the child benefit for themselves.
McKeen therefore ignored the request for payment from Blue Cross.
Last year, Blue Cross, with the approval of the province, began deducting the child benefit from McKeen's monthly disability payments, as well as a $500 retroactive payment.
In addition, McKeen's monthly CPP benefit of $759.79 is also deducted.
As a result, her current monthly Blue Cross disability payment has dropped from $2,009.88 to only $172.05.
The McKeens say they are facing bankruptcy.
The Premier's Council on the Status of Disabled Persons is supporting McKeen.
"The child benefit belongs to the the children and not to the adult," said Randy Dickinson of the council.
"It's not to be clawed back from any other long-term disability payments which relate to a disabled adult."
Dickinson said the province should be aware of a recent court decision in Alberta in which the Clarica life insurance company tried making similar claims as Blue Cross and lost.
The New Brunswick government and Blue Cross say in their statement of defence they are allowed to claim the federal child benefit because that's what it says in the province's disability plan.
They say that under the "direct offset" provision of the plan, they have the power to claim any amount paid under CPP.
A court date has not yet been set for the case.
Copyright © 2004, Canadian Press