Canada Pension Plan Disability Benefits
The Canada Pension Plan provides monthly payments to people who contribute to the plan during their working years.
You may be eligible for CPP disability benefits if:
- you contributed to the CPP for a certain number of years
- you’re under 65 years old
- you have a severe and prolonged mental or physical disability
- your disability prevents you from working on a regular basis
The benefits include payments to children of a person with a disability.
Apply as early as possible if you think you’re eligible for CPP disability benefits. Quebec residents may be eligible for a similar program called the Quebec Pension Plan . It may take several months to process your application.
If you applied for CPP or QPP disability benefits and were told that you’re not eligible, you can ask to have your application reviewed or considered again.
Once you reach age 65, your CPP disability benefit will automatically change to regular CPP payments. Your regular CPP payments may be less than the CPP disability payments you got before.
If so, consider:
Coverage Terms And Responsibilities
Disability insurance is generally one of the more important parts of a benefits package. Some companies opt to only provide short-term disability, others don’t offer one at all. Long-term disability is not a requirement in any state.
Many employers offer long-term disability programs funded through a third-party administrator such as an insurance agency. Employers can choose how much coverage to elect for their employees.
The duration of benefits are variedsome plans pay three to 10 years’ worth of disability, while others may pay until age 65 based on a rate schedule. It depends on the choices the employer has made.
Employees filing for disability can only qualify for coverage under certain terms. The main terms are listed below:
- Employees usually need to work for the employer for a certain amount of time before coverage kicks in
- Employees need to work full-time, usually 30 hours or more a week
- Employees need to elect their benefits and be contributing to the plan
Long-term disability benefits are not limited to monetary assistance. Larger companies can afford different options. Some provide occupational re-training to assist those who cannot perform their job anymore. Others are more restrictive, having clauses that prevent disability insurance for pre-existing conditions.
How Does Long Term Disability Insurance Work
For the most part, long term disability works just like any other type of insurance.
As the policyholder, you make recurring premium payments, typically on a month-to-month basis. In return, your insurance carrier agrees to pay you long term disability benefits if you suffer a serious injury or illness that prevents you from working for an extended period of time.
Each long term disability insurance policy spells out:
- The benefit amount, or how much long term disability will pay you on a monthly basis if you become disabled.
- The elimination period, or the amount of time you must wait after a disabling event before your long term disability benefits start.
- The benefit period, or how long your long term disability benefits will last if you become disabled.
- The definition of disability, or what types of conditions your policy will cover and what it wonât cover.
- The premium amount, or how much disability insurance will cost you on a monthly and annual basis.
Letâs dive deeper into each of these.
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Long Term Care Insurance
Long-Term Care insurance pays for a variety of services for people who are unable to care for themselves due to an injury such as a paralysis from a car accident, a chronic illness such as arthritis, an acute episode such as a stroke, or a cognitive impairment like Alzheimer’s disease. Long term care services may include assistance in a home, adult day care center, an assisted living facility, or nursing home.
New enrollments into LTCi are no longer available as of February 1, 2016.
Employees who had enrolled in LTCi may continue the coverage currently in place. Employees enrolled in this coverage must pay CNA directly for their LTCi premiums.
Ial And Residual Disability Benefits
These benefits are not generally part of the standard LTD contract of most insurers, but are available as an option.
The partial disability benefit provides coverage to an individual who qualifies for the total disability benefit and is able to work in a reduced capacity. Generally, benefits are payable if the individual has a loss of income exceeding 15-20% compared to his/her indexed pre-disability earnings. The eligibility for partial disability benefits is linked to the definition of disability. For example, if the “any occupation” definition of disability is applicable, an individual will be eligible for partial disability benefits if his/her earnings capacity in any occupation is reduced by at least 15-20% due to the disability.
The residual disability benefit pays a specific percentage of insured earnings in contrast to the partial disability benefit which varies and is based on a percentage of loss of income. The residual benefit is payable if a disability lasts at least as long as the initial assessment period and prevents the individual from being fully employed. Residual disability payments begin after the total disability period ends. The benefit is reduced only if the individual’s income from all sources exceeds 100% of the employee’s pre-disability income.
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How Long Does It Take To Get Long
Once you have filed a disability claim with your insurance company, how long does it take to get your long-term disability benefits?
Unfortunately, the answer is not clear-cut and is based on a variety of factors. In most cases, it will take between 45-105 days for you to receive the initial decision about your claim.
Here weve covered some influencing factors that can affect how long it will take and how you can help to speed up the claim approval process.
An Ltd Benefits Denial May Delay Your Payments
If you have a long-term disability policy and receive approval for benefits based on your medical condition and other factors, it should become payable as soon as the waiting period specified in the policy ends. However, these insurance carriers often deny claims from workers who need these benefits. It is not uncommon to need to fight for the benefits you need after an illness or injury prevents you from working.
If this happens to you, you may receive a denial notice that outlines why the insurance company denied your claim and other information, including the date of their decision. It is imperative that you keep this notice.
Once you receive a denial notice for your Toronto LTD benefits, we encourage you to contact a long-term disability law firm. They may be able to help you understand what happened and take action if you qualify. Your options may include:
- Filing an internal appeal with the long-term disability insurance carrier
- Filing an external appeal against the carrier and challenging their decision
A long-term disability lawyer may be able to review your policy and help you understand the option that may best suit your case. It is important to act quickly. Under the Limitations Act of 2002, you may only have 24 months from the date on your denial letter to file suit to pursue compensation for the benefits your policy outlines and that your medical condition qualifies you to receive.
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Women Pay More Than Men
Even with all other factors being equal, women can pay up to 40 percent more in premiums than men for disability insurance. Thatâs because women suffer disabilities that impact their careers, such as breast cancer, autoimmune disorders, and depression, more than men. Disability claims for women also typically last longer than those for men.
- A 40-year-old male applying a $3,300 monthly benefit will pay $61 a month.
- A 40-year-old woman getting the same coverage will pay $80 a month.
For what it’s worth, the gender price gap for disability insurance is the opposite of life insurance. Women consistently live longer than men, which means they get the same preferential treatment you see men getting here.
What Does Long Term Disability Insurance Cover
Here are the top five reasons for filing long term disability claims:
As you can see, the scope of disabling events is wide. That’s why perhaps the most important factor when considering long term disability insurance is a policy’s definition of disability.
How a policy defines disability will determine how much, and even if, you collect benefits following an injury or illness. Some policies will pay out a monthly benefit if an injury prevents you from working at your normal job, but allows you to do other types of work that will nonetheless reduce your income. Other policies will not pay benefits if you are able to work in another type of profession, even if you earn less money.
A policyâs definition of disability is based on your capacity to work. Maybe youâre unable to work in your chosen profession, but can do other work. A disability may allow you to work in a reduced capacity. Serious ailments can prevent you from working in any job.
To collect on a claim, you must meet the policyâs definition of disability. This can vary greatly by company and policy. The broader the definition, the more it will cost.
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What Is An Elimination Period
Under most disability insurance policies, you must wait a period of time before the insurer will pay out your benefits. This waiting period is called the elimination period.
Most short-term disability policies have an elimination period of between 0 and 14 days. Long-term disability policies have varying waiting periods, but 90 days is the most common. You can also purchase LTD insurance with a much shorter or longer elimination period.
Many long-term disability experts compare an elimination period to a health insurance deductible, which is the amount of money you must pay before your insurance company starts to cover your health care. When you purchase health insurance, a policy with a larger deductible typically will give you a lower monthly premium. However, youll have to pay more money out-of-pocket for your care until your spending exceeds the deductible.
Similarly, in the world of private disability insurance, a policy with a longer elimination period will have cheaper monthly premiums. However, if you become disabled, youll have to wait longer before the insurer starts paying your short-term or long-term disability benefits.
Are There Other Applicable Policy Provisions Regarding When Long
While meeting the definition of disability is usually the most crucial aspect of your long-term disability claim, there may be other provisions in your policy that affect your long-term disability start date. It is important to read your entire policy to ensure that you fully understand all applicable provisions.
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What Qualifies For Short
To qualify for short-term disability benefits, an employee must be unable to do their job, as deemed by a medical professional. Medical conditions that prevent an employee from working for several weeks to months, such as pregnancy, surgery rehabilitation, or severe illness, can qualify to receive benefits. Since employers in most states must legally provide workers’ compensation insurance to all employees, any injuries incurred on the job are typically covered under a workers’ comp policy and are therefore not eligible for short-term disability.
While most non-work-related temporary medical conditions are covered by a short-term disability policy, there can be exclusions for preexisting conditions or intentional and foreseeable injuries . While employees can qualify for time off under the Family and Medical Leave Act to care for a sick relative, most short-term disability policies would not provide benefits if the covered employee is not the one with the illness.
Short Term Vs Long Term Disability
Disability policies are classified as either short term or long term. Short term policies only pay benefits for a maximum of 2 years, and many pay for only 3-12 months.
Long term policies typically pay benefits for at least 2 years. Most policies typically pay until you turn 65 or for the rest of your life.
Many businesses carry disability coverage for their employees, but by and large its short term coverage only. Its not uncommon for employees to be left on their own when it comes to long term disability.
You May Receive Other Benefits During The Waiting Period
If your employer offers long-term disability insurance policy as a group policy, they might also offer paid time off, short-term disability, or other options to bridge the gap until your waiting period ends and your LTD benefits become payable. These short-term benefits may only provide coverage for 12, 16, or 24 weeks, depending on the accompanying long-term disability policy.
If you are self-employed or otherwise do not have employer-sponsored long-term disability coverage, you may still have options for receiving short-term benefits during your elimination period. This may include Employment Insurance sickness benefits, which may provide up to 15 weeks of benefits if you qualify.
What To Consider When Buying Disability Insurance
If you’re considering disability insurance, make sure you:
- check with your employer to see if you already have group disability coverage with your employer’s plan
- shop around, especially if you’re considering private disability insurance
Consider group insurance offered through a union, guild, or professional or alumni association. Premiums for this type of coverage usually increase as you get older. You’ll need to renew your insurance every few years.
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Do You Have To Pay Back Long Term Disability Benefits
Typically, you will not have to pay private long term disability insurance benefits back. These benefits are treated as tax-free income that you have earned by paying premiums. However, there are rare exceptions where you may need to pay a portion back.
By law, you are allowed to collect benefits from a private insurer and the government. In fact, you are required to if your private long term disability policy has an offset provision. The amount of Social Security Disability Insurance benefits you collect will then be deducted from what your private insurer pays you.
SSDI benefits are difficult to get approved. If you are approved, it could still be months, even years, before you begin receiving benefits. That’s why SSDI benefits begin with something called a catch-up payment. It’s a lump-sum that makes up for the time it took the Social Security Administration to review your application.
Meanwhile, long term disability is more straightforward. Approval is quicker and benefits start paying as soon as your elimination period ends, likely before your application for SSDI benefits has been processed. If so, your policy’s offset provision will require that you pay the SSDI catch-up payment you received back to your private insurer. That way, your SSDI benefits are being accurately deducted from the private benefits you receive.
Does Maternity Leave Count As Short
Youve probably heard of circumstances where people use their short-term disability for pregnancy and maternity leave. Doing so is fairly common, but whether or not youre able to do so yourself is also dependent on your plan.
We actually see a lot of short-term disability policies that specifically address maternity leave, explains Bartolic. These plans also will explain how much time off is offered for maternity leave, which can vary based on things like whether the mother had a vaginal birth or a c-section.
Some employers exclude maternity leave from their short-term disability plan and have an entirely separate program to address paid leave for childbirth.
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Review Of Injury Or Illness
A disability is a medical condition that causes an employee to be unable to perform any combination of duties that regularly took at least 60% of the employee’s time at work to complete before the injury or illness, or that makes the employee unable to be gainfully employed.
Gainful employment is employment that the employee is medically fit to perform, for which the employee has at least the minimum qualifications, and that provides a salary of at least 60% of the employee’s pre-disability salary.
For information on reviews of the adjudicator’s decisions, see directive LTDI Adjudication Review.
Rehabilitation And Returning To Work
Employees and supervisors will need to work together with a Corporate Advisor and an occupational health nurse or an injury recovery specialist to achieve the best outcome. Options include modified job duties, reduced hours, or retraining and finding an alternate job if an employee is permanently medically prevented from returning to their own job.
Plan a trial period with your support team for a gradual return to work to readjust and build up endurance. Employees are paid for hours worked during the trial and will continue to receive LTD benefits for hours not worked. If you have questions about your pay, contact AskMyHR by submitting a service request using the categories Myself My Team or Organization > Pay > Salaries & Other Wages.
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Does Sdi Cover Pregnancy
Yes. For a pregnancy without complications, the benefit period is generally from four weeks before your due date to six weeks after your delivery. If your pregnancy prevents you from working before or after that period, your doctor has to explain why on the claim form.
Note: This article focuses on SDI for people with disabilities and Paid Family Leave for people taking care of a person with a disability. If you have questions about Pregnancy Disability Leave, contact the EDD.
How To Choose A Disability Policy That Fits Your Needs
If your employer offers STD insurance as mandatory or voluntary part of your employee benefit package, thats great but its just a start. You should also see if they offer a long term group plan if youre self-employed you may be able to get coverage through a professional association. Either way, group insurance can be an excellent choice. The company or association is buying for a large group of people, so the premium is typically lower than for an individual policy. In addition, your HR department will likely have more expertise and leverage to negotiate favorable terms. On the other hand, youll probably have less opportunity to tailor the policy to your needs, compared to an individual policy. If the premiums are paid with pre-tax dollars then the income benefit you get down the road will typically be taxed. Finally, if you leave the company or association, in most cases youll also lose your coverage.
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