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I am sorry to hear this.
I suggest your brother go over the head of his worker to a supervisor and indicate that not only is this causing him to undergo undue hardship but that there was already an agreement that he would not be penalized for having the annuity and he has relied on this agreement.
He can threaten a lawsuit.
He should also call ARCH Disablity Law Centre and ask for some ideas of what to do and which lawyer may agree to help, if necessary:http://www.archdisabilitylaw.ca/