Our team of long-term disability lawyers at Samfiru Tumarkin LLP gets a lot of questions about the difference between long-term disability (LTD) benefits and Canada Pension Plan disability (CPPD) benefits.
Many LTD insurers tell claimants to apply for CPPD. But claimants then wonder whether they have to apply and what happens if they do not.
Here are five things you should know about the relationship between LTD claims and CPPD in Canada.
1. LTD is not the same thing as CPPD
A long-term disability claim is the benefit from income replacement insurance purchased privately by an individual. This insurance might also be included as part of an employee’s group benefits plan at work.
Canada Pension Plan disability benefits are a government pension provided to individuals. To qualify for CPPD, you must satisfy the government that the disability that prevents you from working is both severe and prolonged.
2. Getting CPPD may change the amount an LTD insurer pays
Long-term disability insurance companies often ask claimants to apply for CPPD because most LTD policies have provisions that say insurers get a credit for any CPPD that claimants receive.
For example, a disabled employee might receive $2,000 per month from their LTD insurer and then get approved for $1,000 per month in CPPD. That person would not receive a total of $3,000 in benefits per month.
Instead, the insurance company’s obligation to pay is reduced by the amount the claimant receives from CPPD. So this claimant would still receive $2,000 in benefits per month: $1,000 from the insurer and $1,000 from CPPD.
3. If you want to claim LTD, you should also apply for CPPD
Claimants often ask whether they should even bother applying for CPPD, if the insurance company deducts any CPPD benefits from the total they will pay. But I always recommend applying for three reasons.
First, if you fail to apply for CPPD, your LTD insurer may estimate how much you would have received from CPPD, had you applied, and then reduce your monthly LTD amount accordingly.
In some cases, I have even seen insurers take the position that claimants breached their contractual obligations under their LTD policies by not applying for CPPD and then cut off LTD payments altogether as a result. We have successfully challenged such denials by insurers, but it is a risk claimants should keep in mind.
Second, if you apply for CPPD and get approved, the LTD insurer will have greater difficulty in arguing in the future that you are not disabled from working, since the federal government has deemed your disability both severe and prolonged. Getting CPPD means your case for receiving LTD on the basis of being disabled from working is that much stronger.
Third, if you apply for CPPD and get approved, you’ll receive payments no matter what happens with your LTD benefits. Even if your insurer denies your LTD claim or cuts off your benefits, you’ll still have financial help while you challenge the insurance company’s denial.
4. You can appeal a CPPD rejection — but you may not have to
A long-term disability claimant may be rejected when they apply for CPPD. This happens for various reasons, and claimants can appeal the rejection.
If the decision is overturned, the individual is subsequently approved for CPPD. But unless their LTD policy specifies otherwise, claimants are not obligated to appeal the CPPD rejection.
If a CPPD application is rejected, an insurer cannot reduce the monthly LTD benefits by the amount that the claimant could have received from CPPD — because they did not receive it.
In many cases, however, LTD insurers cut off claimants’ LTD payments after their CPPD applications are rejected. This is not fair, and often it is not legal.
5. You should contact a disability lawyer if your LTD benefits are cut off
I advise claimants not to accept an insurance company’s LTD claim denial without consulting a disability lawyer.
In many instances, insurers who deny legitimate LTD claims subsequently pay significant amounts of money to settle such claims. In other cases, the insurers reinstate claimants after a disability lawyer becomes involved.
At Samfiru Tumarkin LLP, our lawyers in Ontario, British Columbia and Alberta resolve LTD claims with insurance companies regularly. Our team also focuses on employment law matters, including terminations, layoffs, severance pay and workplace disputes.
We provide peace of mind and fight for our clients’ rights, as shown by previous cases involving Sandra Bullock and Julie Austin. Most importantly, we ensure that they get paid what they are owed under their disability policies.
Do you have questions about your disability claim and CPPD? Has your long-term disability claim been denied or cut off?
Contact the firm or call 1-855-821-5900 to secure assistance from a long-term disability lawyer in Ontario, British Columbia or Alberta. Get the advice you need — and the compensation you deserve — from the most positively reviewed disability law firm in the country.
Sivan Tumarkin is a disability lawyer and partner at Samfiru Tumarkin LLP, one of Canada’s leading law firms specializing in long-term disability claims and employment law. He also provides free advice as the host of Canada’s only Disability Law Show on TV and radio.