What Is Long Term Disability Insurance
In the event of an injury or illness where you are not able to return to work, long term disability insurance offers some protection by providing you with a portion of your income that can go towards bills, expenses, and medical treatment and/or rehabilitation. Essentially, it aims to offset any financial hardship you might suffer as a result of being unable to return to work due to a medical condition.
Most policies provide benefits for the first two years if you are unable to meet the requirements for performing your own occupation, but after two years you must be unable to perform the tasks required by any occupation for which you are reasonably qualified by education, training or experience in order to retain long term disability benefits.
Watch this video to learn more about long term disability insurance in Ontario :
Long Term Disability Coverage Through The Canada Pension Plan
The Canada Pension Plan provides many financial benefits and programs to individuals and families, depending on individual circumstances and other qualifying factors, including long term disability benefits.
The disability benefit is a taxable, monthly payment available people who contributed to the plan while they were employed, and then became unable to work regularly at any job because of a physical or mental injury. The benefit is meant to replace employment earnings for people who recently paid into the Canada Pension Plan. Benefits are also available to children if at least one parent is determined to be eligible for the CPP disability benefit.People who qualify dont receive a CPP disability benefit due to a particular disease or medical condition, but on how that condition and resulting treatment affects the persons ability to return to work on a regular basis. Weve created a comprehensive CPP Disability guide that you can use to learn more about the program.
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Who Pays My Insurance Plan When Im On Mat Leave
One key factor thats often overlooked by individuals while on maternity leave or before going off of work for a sick leave is what to do about the benefits they currently receive through their employer.
Mainly, the question is: Who is responsible for paying them?
This depends on your employer and your specific insurance provider. Some employers pay 100% of insurance plans, but this might change while youre on leave. You might have to pay a portion or the full amount in order to keep your plan in place.
I often hear that individuals arent aware of this and dont plan for it in their budget. People often only find out that their benefits are ending when they receive a notice so, they lose out on their benefits when they dont have to. Usually its just a matter of not knowing to ask about it. Be sure to contact your HR department to learn whos responsible for paying before its too late.
This advice applies to any pension programs that youre paying into, as well. You might lose out for the months youre away you may be able to contribute while youre away or make up for your lost contributions once you return to work. Always ask your employer how taking a leave will affect your contributions.
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What Happens When Long Term Disability Ends
What happens when long-term disability ends in Ontario, Canada?
You may be able to receive long-term disability benefits in Ontario, Canada for a lengthy period of time. However, its natural to wonder what may happen when your LTD policy ends if you, for example, recover from the disability you were facing or reach the age of 65. There are other benefits you may be able to apply to for possible help with additional payments you may have accrued.
Myth : You Must Have Long
While we talk about how important this long-term disability insurance is, this does not mean that you have to have this policy until you retire. In fact, it may be best not to have this until retirement.
If a person were to have LTD covering them until they retire, they often find that they pay tons more than what they really needed it to. Most professionals recommend that you have a five-year policy.
This means that the policy will pay you for five years after the policy is claimed when you are disabled.
In most cases, a disability is only going to last for three years, hence why having a policy that lasts until you retire can be a waste of money.
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Ensuring You Get All The Benefits You Are Entitled To If You Fall Ill Or Have An Accident
Depending on the nature of your illness or the accident you have been involved in, plus the number and nature of disability insurance policies you have, ensuring you get the right and full amount of benefit you are entitled to can be a bit of a minefield.
In certain circumstances, it can reap benefits if you seek the advice of a lawyer experienced in insurance policy claims. Particularly as insurance companies are not known for being overly generous.
In addition, if you have a claim denied for short-term disability when you have a long-term illness, that does not automatically mean you will not be able to claim on your long-term disability insurance policy.
Effects Of Leave Without Pay On Benefits And Employment
Your leave without pay will have an impact on:
Once the Pay Centre receives the necessary documentation from your departmental human resources team, it will provide you with a benefit letter outlining the impact your period of leave without pay will have on your benefits.
The Pay Centre will also explain:
- how your sick leave benefits are impacted
- how to complete and submit disability and long term disability insurance forms
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Results Of Your Ltd Ending Because You Reached The Age Of 65
In many cases, LTD policies expire when you reach the age of 65. While some policies offer lifetime benefits, these policies may be far less common that policies that expire as you age.
If you made a minimum of one valid contribution to the CPP, you may qualify for the CPP as part of a retirement pension after you reach the age of 65. However, you may apply for retirement benefits from the CPP as early as the age of 60 or as late as 70. Note that:
- If you start retirement payments early, your payments may be smaller.
- If you start retirement payments later, your payments may be larger.
It may take a significant amount of time for you to begin receiving benefits for retirement through the CPP. You may wait:
- Around 14 days for an online application.
- Around 120 for applications delivered in person or mailed.
Keep in mind the length of time it may take to begin receiving benefits. You may wish to begin the application process before your LTD benefits cease to ensure you do not have a period in which you are not covered.
Informing The Pay Centre
Your manager will have the departmental leave system updated with any additional approved leave. They will provide notification of your separation from the public service to your departmental human resources, who will subsequently provide the necessary information to the Pay Centre. The Pay Centre will, in turn, provide you with the information relative to your situation and separation from the public service
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Employment Termination And Long
Can I be fired while I am on long-term disability? We get this question all the time.
Unfortunately, the short answer is yes. Generally speaking, employers can fire employees at any time. They just cant fire you because of your disability that would be a human rights violation. Legally, they have to provide termination or severance pay.
So, you may have a legal claim against your employer in some cases. Firstly, if you are terminated without severance pay. You would also have a case if you believe it was because of your medical condition or disability. In these cases, you can win compensation in court.
Most employers wont terminate you if youre on long-term disability because they know it looks bad. They want to avoid lawsuits and human rights claims. Therefore, cautious employers will allow you to be on sick leave for up to two years.
But, after two years, your employer may have the option to terminate you without cause. This means they would only have to pay the minimum severance allowed under provincial laws. This type of termination is based on the frustration of employment. This is a complicated area of law. If this is your situation, then I urge you to get specific legal advice.
Are My Benefits Taxable
Generally, if you, the employee, have an individual disability insurance policy where you pay the premiums then any payments you receive are not taxable. If the employer pays the premiums for the employees disability insurance policy then when the benefit payments are received by the disabled employee they are taxable.
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Taxation Of Benefit Payments
Benefit payments from the Bronze option are taxable because the University pays thepremium. In addition, the Bronze portion of your benefits under the Silver and Gold options are taxable, because the University pays that part of the premium. Top-up benefits under the Silver and Gold options are not taxable, because you pay thepremium.
When I Sue The Insurance Company For Disability Benefits What Do I Actually Sue For
In long term disability actions you are suing for the payment of the disability benefits to which you are entitled. If you and your lawyer decide that the insurance company acted unfairly when they denied your claim you may also sue for bad faith. Your lawyer will also make a claim for pre- and post-judgment interest on the amounts claimed along with a financial contribution from the defendants which will go towards your legal fees.
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Is Long Term Disability Income Taxable In Canada
It is one of the most common questions about disability income tax, whether taxable. People not only search for long term disability insurance tax plans. Rather they also want to know about short-term insurance, but e. g. is also short-term disability taxable or not.
Actually, both short-term and long-term disability income taxable in Canada whenever you file your own income tax returns per year. Until 2015, tax in Canada required that when the insurance income is issued for you, no tax will be deducted. Rather, it would be counted annually.
But in 2015, the requirements have been modified. Now, whenever you are issued with income, the tax will be added accordingly. Taxable benefit meaning mostly ensures you about your payable taxes as per your income and benefits. You had enjoyed replacing your income when you were disabledfor example, fair market value, business policy etc.
There are also non-taxable benefits Canada on some specific factors such as retirement plans, normal Medicare etc. For these benefits, you will get the service free of tax or, in some cases, with partial taxes, which is too little in amount.
Can An Employer Terminate An Employment Agreement For Frustration Of Contract
In some cases, an employer may be able to terminate the employment agreement for frustration of contract. Frustration of contract in this context of disability leave can occur if it becomes unlikely that the employee will be able to return to work within a reasonable amount of time. If frustration of contract has occurred, an employer is only required to pay the employee their minimum entitlements under the Employment Standards Act.
In this video âBasics of Long Term Disability Insuranceâ , Employment Lawyer Andrew Monkhouse covers what long term disability insurance is, how it helps employees, and what it means for employees with disability insurance.
Given the complexity of these issues, please contact a Long Term Disability Lawyer at Monkhouse Law for guidance.
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Know Your Critical Dates
Some of your application paperwork must be submitted within a certain amount of time from the start of your leave from work often within the first 30 days. Late submissions may impact your eligibility for benefits. It may take time for your insurer to review, adjudicate and process your claim: it is common for the adjudication process to take at least 10 business days.
Can My Posts On Social Media Affect My Long Term Disability Appeal
Throughout the process of obtaining LTD benefits, it is vital that you maintain a level of total honesty in order to maintain your credibility. When it comes to invisible illnesses as discussed above, the credibility of the claimant is extremely important.
Many injuries and illnesses cannot be measured objectively by x-rays, blood work, cat scans or MRIs which is why it is so important for you to maintain your credibility. It will be important throughout the process that we not exaggerate or show inconsistencies in reporting symptoms.
It is important not to exaggerate the severity of your symptoms and disability however it is equally important not to minimize your symptoms in public forums, such as social media. Insurance companies are able to go online, look at your social media posts and use these against you during litigation.
Keep in mind that even though you may set your social media privacy settings to be as secure as possible, if the insurance company can prove that these documents are potentially relevant, a Court will order that you produce them.
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Disability And Leaving The Public Service
You should immediately notify your manager if your physician has certified that your illness is continuing and you are unable to return to work. Your manager may grant you leave without pay for a period sufficient to enable you to make the necessary adjustments and preparation for separation from the public service.
Refer to Appendix B of the Directive on Leave and Special Working Arrangements for additional information.
What Is The Difference Between Maternity Leave And Sick Leave
Maternity leave and sick leave are both types of excused absence from employment. As I will explore below, you may encounter problems when your maternity leave and sick leave overlap.
For sick leave, your absence from work is because of an illness or disability that renders you incapable of working. While youre on sick leave, you may be eligible to apply for disability benefits from various sources. These include EI sickness from the government, or short-term disability or long-term disability benefits from your employer.
With maternity leave or parental leave, youre given an excused absence from work. This is so you can raise a newborn child in the months after giving birth.
There may be further distinctions between pregnancy leave and maternity/parental leave. Pregnancy leave refers to the time before the baby is born, and maternal/parental leave is the time after. In Ontario, for example, the pregnant person can get a maximum of 17 weeks of unpaid time off work before the baby is born. Maternity leave or parental leave begins after the child comes into the parents care. It can last up to 63 weeks .
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Can I Be Forced To Retire While On Long
There have been instances where employees on disability have been forced into retirement, and many employers do have a policy of medical retirement after two years. It all comes down to your employers policy. If this happens to you, its best to consult a lawyer to ensure your rights are met.
If youre receiving LTD insurance benefits, Preszler Injury Lawyers in British Columbia says your insurer can legally deduct CPP disability benefits from your payments. Review your policy to see if this is applicable to you.
How Much Will I Receive From Long Term Disability Insurance Benefits
For employer-sponsored group long term disability insurance, benefits can cover 50% to 80% of your pre-disability salary, with a typical policy covering 66.66%. However for many policies, there may be monthly maximums which put a limit on the amount you can receive.
For individual, private disability policies, benefits are pre-determined by the disability policy so that an injured or sick person already understands what their monthly disability benefit will amount to in the event they are unable to work.
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What If You Are Terminated While On Long Term Disability
It is discriminatory under human rights legislation to terminate an employee due to their disability. Under the Human Rights Code of Ontario, an employer is required to accommodate an employee to the point of undue hardship. If you are terminated from your job while on disability leave, you should contact a Long Term Disability Lawyer at Monkhouse Law as soon as possible for advice about your claims and whether it may have been discriminatory.
Who Pays For Long Term Disability Coverage
Long term disability insurance can be purchased privately by individuals through an insurance broker or directly through an insurance company. Long term disability insurance can also be made available for purchase through your employer through a group disability insurance policy. In cases of group insurance through your employer, the insurance premiums could be paid by the employer, the employee or shared between the employer and the employee. Depending on what applies to you there are different implications for tax purposes.
If the employee pays the premiums for the long term disability insurance then disability payments are not taxable. If the employer pays for the disability insurance premiums then when the payments are made to the disabled employee they are taxable. The law is more complicated when the premiums are shared between an employee and employer.
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