Apprentice Loans: Disability Definition Update

Summary#

The federal government published a proposal on December 18, 2021 called the Regulations Amending the Apprentice Loans Regulations. It would change how the program defines disability and extend certain loan relief rules to people with long-term but not necessarily permanent impairments. Comments were invited for 60 days and the rules are written to take effect on August 1, 2022 if adopted.

What it does#

• Rewrites the definition of severe permanent disability to match the test used in the Canada Pension Plan Regulations (it focuses on a functional limitation that prevents substantially gainful work and is expected to last a lifetime).
• Replaces the definition of permanent disability with clearer language about long-lasting functional limits that restrict participation in an apprenticeship or the labour force.
• Adds a new definition, persistent or prolonged disability, defined as a functional limit that restricts apprenticeship/labour-force activities and that has lasted, or is expected to last, at least 12 months.
• Changes several loan rules so that borrowers who have a permanent disability or a persistent or prolonged disability are treated the same for certain deferment or repayment calculations.
• Adjusts a repayment timing formula referenced in the rules to apply to people with either a permanent or persistent/prolonged disability (including the use of 114 months minus months already passed in the calculation).

Who's affected#

• People with apprentice loans who have disabilities, including those with long-term but not necessarily lifetime impairments.
• Administrators of the Apprentice Loans Regulations and the federal department running the program (the Department of Employment and Social Development).
• It may also affect apprenticeship training organizations or employers indirectly, because the changes influence when and how borrowers must start repaying loans.

Why it matters#

• More apprentices with chronic or long-lasting disabilities could qualify for the same loan relief and repayment timing that previously applied only to those labeled “permanent.”
• That can reduce financial pressure for apprentices who need extra time or accommodations while they train or recover.
• The change also aligns federal loan rules with the disability test used by the Canada Pension Plan, which can make eligibility decisions clearer and more consistent.
• This is a proposed change (not final law). People had 60 days from December 18, 2021 to comment; the published text says the rules would come into force on August 1, 2022 if adopted.