Understanding Long Term Disability

You have long term disability if, as a result of an accident or illness, you are not able to work for a prolonged period of time

Understanding long term disability criteria in Canada is a critical concept for all Canadians need to know. Especially understanding the benefits that may be available to you if you have a long-term disability and the procedures of applying for long term disability benefits. According to Canadian Centre for Occupational Health and Safety, despite legal and regulatory interventions by the government, a considerable number of people get injured at the workplace and consequently, some end up suffering long term disability.

What is long term disability?

You have long term disability if, as a result of an accident or illness, you are not able to work for a prolonged period of time. Long term disability benefits that may be available to you are provided by:
– The Government of Canada
– Provincial Aid
– Your Employer
– Private Insurance Companies

Long Term Disability Benefits in Ontario

Long term disability benefits vary between different provinces in Canada. However, to access these benefits anywhere in the country, you must have been ill or injured and consequently unable to work for a prolonged period of time. Let’s briefly look at the long term disability benefits available in Ontario:

  1. Long Term Disability Insurance Benefits
    Long term disability insurance benefits are meant to pay you a replacement income when you cannot work for a long period of time. If you qualify for this program, you may receive the benefits until you attain the retirement age which is 65 years old. To qualify for these benefits you must meet either of the following criteria:

– you must be covered under a disability plan with your employer or union; or
– you have purchased a private long-term disability insurance policy.

  1. Workers Compensation Benefits
    Most businesses in Ontario and elsewhere in Canada have their employees covered under workers compensation benefits. To be eligible for benefits under this program, your employer must have been enrolled in the Provincial Workers Compensation Program at the time when you are injured on the job or otherwise rendered jobless for a long period of time. Workers compensation benefits and long term disability insurance benefits are exclusive of each other- if you qualify for both, you can only claim either of them.

  2. Employment Insurance Sickness Benefits
    If you are unable to continue working due to sickness or having a baby, you may qualify for benefits under this program. In addition to being unable to work, you must have accumulated at least 420 hours of insurable employment during the qualifying period, otherwise, you will not be eligible for employment insurance regular benefits.

  3. Canada Pension Plan Disability
    This is a long term disability benefits program run by the government of Canada and applies to all provinces other than Quebec where we have Quebec Pension Plan Disability. You will be eligible for Canada pension plan disability benefits if you are under the age of 65 years and are unable to continue working due to disability. You will also need to have contributed to the Canadian Pension Plan. Usually, your employer remits your monthly contributions to the plan.

Procedure for Applying for Long Term Disability Benefits in Ontario

Once you determine that you qualify for any of the benefits above, you must then make an application. We advise that you consult a long-term disability attorney as soon as you are disabled. This will ensure that your rights are safeguarded from the onset, especially where a private insurer is involved. The application procedure in Ontario is much the same as anywhere else in Canada and will typically involve the following steps:

  • Ensure That You Get Sick Leave
    If your condition is such that you cannot continue working, you will have to get sick leave from your employer. Remember that it is only your doctor who can certify to your employer that you are actually unable to continue working and should be allowed to take leave. If you do not manage your transition from work to sick leave properly, you may lose your job, any group medical plan and the workplace pension. Some employers require medical proof to grant you sick leave. If you do not report to work without leave, the employer may take steps to terminate you for absenteeism.

  • Take Stock of the Benefits That You Qualify for
    Once you have obtained sick leave, you should determine the benefits that you qualify for. If you qualify for two plans which are exclusive of each other (for example long-term disability insurance benefits and workers compensation benefits), you will need to make an early decision on which one you will pursue. Determining your eligibility to various benefits will help you fill the relevant forms.

  • Obtain, Fill and File the Forms
    The forms should be accompanied by a report from your doctor detailing the nature of your injury or sickness. Your doctor’s opinion that you cannot continue working is critical. Here is where to get the application forms:

  • Employee Insurance Sickness Benefits or Canada Pension Plan Disability- obtain the application forms from any Service Canada Office or apply online.
  • Long Term Disability Insurance- obtain the application forms from your employer.
  • Workers Compensation Benefits- get the forms from the provincial offices.

After you have filed your application, the rest will be follow ups and appeals where necessary. Having known how to make your claim, it’s also important to understand a few things affecting your benefits such as taxation and the duration of the benefits.

Are Long Term Disability Benefits Taxable?

There are long-term disability benefits that are taxable and those that are not. The general rule is that if you pay for your own policy premiums; your benefits will be non-taxable. On the other hand, if your employer pays for your policy premiums, you will be required to pay tax on your long-term disability benefits. You can get a detailed analysis of tax implications on long-term disability benefits on the Lawyers Daily.

How Long Does Long-Term Disability Benefit Last in Ontario?

The duration of a long-term disability benefit depends on the particular plan. Most plans will provide you with 60% to 70% of your salary for up to two years after which, you will only receive the benefits if you cannot do any job, not just your previous one.

The duration will also largely depend on your insurance company and the terms of the policy. If you are insured by Manulife, for example, where the policy does not specify the duration of the insurance, you will continue receiving benefits so long as you satisfy the terms of the policy including the definition of “disability”. On the other hand, if you are insured by Sun Life, you will receive your benefits until you attain the age of 65 years unless the policy provides otherwise.

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