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Did you know that you may be eligible for disability benefits from more than one source if you are unable to work due to serious injury or chronic illness? You may qualify for both Canada Pension Plan (CPP) disability benefits and private long-term disability (LTD) insurance benefits. In fact, if you have LTD insurance coverage through a private insurer, the policy may make it mandatory for you to apply for CPP disability benefits.

A lawyer makes clear the difference between CPP and long-term disability claim

Both CPP and LTD are intended to provide you with a financial safety net to fall back on if you become seriously ill or injured. But there are some significant differences in how CPP disability and LTD insurance claims are handled. It’s important to understand those differences so that you know what income replacement coverage you are entitled to and when you may want (or need) to apply for both.

What are CPP disability benefits?

CPP disability benefits are paid through a program operated by the federal government. You qualify for CPP disability benefits if you meet these criteria:

  • You are under the age of 65;

  • You have made enough contributions into the Canada Pension Plan over your working life;

  • You have a mental or physical disability that regularly stops you from doing any type of substantially gainful work; and

  • You have a disability that is long-term and of indefinite duration or is likely to result in death.

  • You have tried all medical treatments available to you.

Your application for CPP disability benefits is submitted to Service Canada along with all the necessary medical evidence and documents to support your claim. It usually takes about 90-120 days for Service Canada to review your application and make a decision. If your application is approved, you’ll start receiving CPP disability benefits and you may receive a lump sum retroactive payment. If your application is denied, you can file an appeal of the decision. An experienced disability insurance lawyer can help you with your appeal.

What are private long-term disability insurance benefits?

Long-term disability benefits are paid under a private insurance policy such as a group insurance plan through your employment or an individual policy that you purchased from a private insurance company (e.g., Sun Life, Blue Cross, or Manulife). To qualify for LTD benefits, you must meet the definition of “total disability” as set out in your insurance policy. The definition of “total disability” changes over time. For the first 24 months, “total disability” typically means that you are totally disabled from completing the substantial duties of your own regular occupation. After 24 months, the definition of “total disability” changes to mean totally disabled from completing any occupation for which you are reasonably suited by education, training, or experience.

You apply for LTD benefits by submitting the application form to your private insurance provider, along with all the necessary medical evidence and documents to support your claim. You can apply as soon as you are disabled from work due your injury or illness, and you can appeal if your application is denied. It is highly recommended that you reach out to a long-term disability lawyer for advice if your LTD claim is denied.

You should also be aware that all LTD disability policies have a waiting period or “qualification period.” The waiting period is usually 90 days, but may be shorter or longer depending on the terms of your policy. You will not receive coverage for the waiting period, even if your claim is approved, but you may be eligible for short-term disability (STD) coverage or Employment Insurance sickness benefits to provide income replacement during the waiting period.

What are the differences between CPP disability and private long-term disability claims?

By now, you will have noticed several differences in how these income replacement plans are administered and who qualifies for coverage. Here are a few more key differences to be aware of:

  • Definition of disability. CPP requires that your disability be severe and prolonged which it defines as “long-term and of indefinite duration, or is likely to result in death." So, for example, if you are in a coma but a doctor believes that you will be out of your coma in a year, your disability is not considered prolonged and indeterminate, and you will not qualify for CPP disability benefits. In private LTD claims, if you eventually recover, you can get compensation for the time that you were unable to work. In other words, private LTD plans offer the possibility of receiving compensation for temporary disabilities.

  • How previous training, education, and experience factor in. CPP disability does not consider your previous training, education, or experience when deciding whether you are employable. CPP only looks at whether you can get "any type of substantially gainful work." Contrast that with private LTD, which looks at whether you can get a "reasonable" occupation, considering your education, training, and experience and the type of job you did before. If you were a professional or a highly skilled tradesperson, and you cannot work at that job but can work at a fast-food restaurant, then according to CPP, you can be gainfully employed and don’t qualify for CPP disability coverage. A Private LTD plan usually has a definition which includes what a potential job allows you to earn. This new wage must reach a threshold as laid out in your policy.

  • Amount you will receive. CPP disability benefits are determined using a complex formula that factors in how much you contributed to the Canada Pension Plan during your working years. The average monthly amount for CPP disability is $1,132.55, and the maximum is $1,538.67 per month as of 2023. Conversely, the amount you receive in LTD benefits will depend on the wording of your policy and your usual income. It is typically a fixed amount per month or calculated as a percentage of your pre-disability income (e.g., 85% of your usual salary).

  • Duration of coverage. You can receive CPP disability benefits until you reach 65 years of age. When you turn 65 your CPP disability benefit is automatically changed to a CPP retirement pension. The duration of LTD benefits, on the other hand, will depend on the terms of your policy. The policy may say you are entitled to income replacement until usual retirement age (65) if you continue to be totally disabled, or until you are able to return to work, or it may limit disability coverage for a set number of years.

Can you get CPP disability and long-term disability benefits at the same time?

Yes. You may qualify for both LTD and CPP disability at the same time, and in fact, as mentioned above, your LTD policy may require you to make a CPP disability claim. This is typically referred to as an “offset” or “coordination of benefits” in your LTD policy. If such a provision applies to your long-term disability claim, your monthly LTD benefit payment will be reduced by the amount you receive under your CPP disability claim.

You may wonder why you would want to apply for both if it doesn’t result in an overall increase in your monthly payments. There are good reasons to apply for both LTD and CPP disability benefits. One significant reason is that your LTD policy may give the insurance company the power to reduce your monthly LTD benefit payment by the estimated CPP disability payment to which you would have been entitled, even if you didn’t apply for it. Another important reason to apply for CPP disability benefits even if you have LTD coverage is to have a safety net if your LTD provider cuts you off (e.g., at the 24 month mark when the definition of total disability changes). That way, you can still receive CPP disability benefits while appealing the denial of your long-term disability claim.

Want legal advice on CPP and private long-term disability claims?

Long-term disability claims are complicated. It’s not easy to manage a CPP disability application and LTD claim while dealing with the challenges of a serious injury or illness. The good news is that you don’t have to navigate the process on your own. Ludwar Law Firm has 27 years of experience representing clients with disability claims in Alberta and Saskatchewan. Our clients appreciate that we take the time to explain each of their options, what is required to make each type of disability claim, and what to expect during the claims process.

Our legal expertise has helped win even difficult claims involving depression, chronic fatigue syndrome, and fibromyalgia. We will help you determine which benefits you are eligible to claim and guide you through the application process. If you have already brought a CPP disability application or long-term disability claim and been denied, we can help you appeal. We welcome you to contact us today to schedule your free consultation. We’ll help you get the benefits you deserve.


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