If you become chronically ill or are injured in an accident and suddenly cannot work, you want to know that there are ways of continuing to pay your bills. In Ontario, there are several types of disability insurance that will cover you.
For injuries or illnesses that put you out of work for long periods of time, two options of insurance include long-term disability (LTD) benefits and Canada Pension Plan (CPP) disability benefits.
Though both of these benefits can help you to pay your bills and medical expenses if you’re unable to work, they are not interchangeable. In this article, we’re going to take a look at how the two policies differ and how they may work together.
CPP Disability Benefits
Canada Pension Plan or CPP disability benefits are provided by the Canadian government. In comparison, long-term disability benefits are usually taken out privately. To qualify for CPP disability, you have to prove that you have a severe and prolonged disability that stops you from working.
The criteria for the CPP disability benefits are pretty high. In fact, you need to prove that your disability is long-term and indefinite in duration, or that it could result in death.
Not everyone is entitled to CPP disability. You have to have made regular contributions to the CPP disability fund to be eligible. If you apply for CPP and are rejected, you have the right to appeal the rejection.
Long Term Disability Benefits
Long-term disability benefits are part of an income replacement plan that is usually taken out privately by an individual – though it may also be part of a benefits package that an individual receives from their place of work.
Long-term disability benefits usually cover between 60–85% of your regular income but could be reduced if you receive any other benefits, including CPP benefits.
Can I Apply For Both CPP And Long-Term Disability Benefits?
Yes, in fact, it is recommended that you do.
If you do not apply for CPP, there is a chance that a long-term disability insurer will deduct an estimated amount you would have received from the CPP benefits from your LTD benefits. If you have applied and successfully gotten CPP, you will not lose out on any money when insurers proceed with the deduction.
Some insurers may include a clause that states an individual must apply for CPP first, and if you don’t, you may be in breach of your contract.
Applying for CPP disability alongside your LTD benefits also makes it much more difficult for your LTD insurer to claim you are not unable to work. Your LTD insurer may try very hard not to grant you benefits. However, approval from a government agency that you are, in fact, unable to work, will definitely help your case.
Lastly, CPP is a safety net. Your LTD insurer may see it fit to stop your benefits or deny your claim. So, if you have already applied for CPP benefits, you will receive income anyway.
How CPP And Long-Term Disability Benefits Work Hand-In-Hand
LTD insurance policies are likely to include a clause that states that insured individuals must apply for CPP benefits. Once the application goes through, the LTD insurer will then reduce the payable amount in accordance with how much you are granted by CPP.
Can LTD Deduct My CPP Benefits?
Yes. Though LTD insurance is likely to cover between 60–85% of your regular income, this amount is subject to deductions based on how much you receive from CPP and any arrears payments. LTD benefits may also be reduced if you receive other benefits too.
When To Get Legal Counsel
The most common situation in which individuals seek an insurance claim and benefits lawyer for long-term disability is if their claims are rejected or their benefits are cut off. If your LTD claim is rejected, a personal injury lawyer can help you to gather the evidence you need to appeal the rejection. If your benefits are suddenly cut off, you should contact a long-term disability lawyer immediately.
Call Virk Lawyers Now If You Are Looking To File A Long Term Disability Claim.
Are you looking for a personal injury lawyer in Hamilton? Residents in Hamilton and the surrounding areas know they can rely on Virk Lawyers to help them make disability claims and appeal rejections. We are a team of experienced lawyers dedicated to making this process as smooth as possible for you. Get in touch today to find out more information about how we could help!