What’s the difference between CPP disability and Long-Term Disability?

Surprisingly, our Disability Law firm gets a significant amount of inquiries from claimants that are confused between long-term disability and CPP disability. Below is some information about both both benefits.

What is CPP Disability?

CPP disability (or otherwise called CPPD) is a disability benefit that is provided by the federal government to provide partial replacement for your lost income because of your inability to work. Eligible claimants must prove to the federal government that he or she suffers a severe and prolonged mental or physical disability. Severe is defined by law as someone who is incapable regularly of pursuing any substantial gainful occupation. Prolonged, means that the claimant will suffer a disability that is likely to continue for an indefinite duration or until that claimant dies. In order to qualify for CPP disability, you must’ve made contributions to the Canadian pension plan in four of the last six years, with minimal levels of earnings in each of these years, or three of the last six years for those with 25 or more years of contribution.

If you suffer from a chronic illness or an injury that prevents you from working, you should no doubt apply to the Federal Government for CPP disability. A decision from service Canada will take about 3 to 4 months, so it’s important that you apply sooner rather than later. Typically, service Canada will provide you with a lump-sum payment that will compensate you from the data your disability, to the date the payment is made. At that point, you would then receive a monthly benefit on the first of every month to assist you with your expenses. The maximum disability benefit for 2019 is $1362.30.

A CPP disability toolkit can be found by clicking here. In there you will find a complete guide that will answer most of your questions including how the benefit is calculated.

What is Long-Term Disability?

Long-term disability, is not a government-sponsored plan. Long-term disability is available through individual policy purchase or a group plan issued through an employer or association. Typically employer provided disability plans offer more limited protection, but at a lower cost to the employer or the insured. Medical evidence is not required at the time of application by the employee. If an employer purchases long-term disability through its group plan, each employee is covered, no matter what their medical history. Most policies issued through employers contain a pre-existing condition provision, which means that long-term disability benefits would not be payable for any disability which begins within the employee’s first 12 months of coverage if that disability is due directly, or indirectly to a pre-existing condition. A pre-existing condition is normally defined as a condition for which you were treated or attended to by a doctor, or were prescribed drugs that were taken during a certain amount of time prior to your effective date of coverage.

Long-term disability benefits will have an elimination period, which is also called the waiting or qualification under some policies. Common elimination periods are 60, 90, 120 or 180 days. The most common elimination period is 90 days. After the elimination period, you would then apply for long-term disability if your disability prevents you from returning to work. We recommended that you apply for long-term disability prior to the end of the elimination period in order to give yourself enough time to gather all of your medical records, give your doctor enough time to fill out the attending physician statement and give the insurance company enough time to review your claim and then ask or obtain any additional information required to complete their assessment.

Long-term disability policies have a definition of total disability. Total disability is defined in virtually all of group or individual contracts. Long-term disability for the first 24 months, is payable if you, as the insured claimant, is totally disabled from completing the substantial duties of your own regular job. After 24 months, the definition of total disability changes. This is typically called the change of definition. This is a more restrictive definition of disability from the insured’s perspective. The definition changes from being unable to complete the substantial duties of your own job, to being totally disabled from completing any job in which you are reasonably suited by education training or experience. In short, you must be totally disabled from working any job which you are trained for or educated enough to complete.

Is my long-term disability reduced by my CPP benefit?

Yes. In virtually all long-term disability plans, monthly long-term disability benefit payment will be reduced by the amount of CPP that the claimants obtains. Therefore if you obtain $3600.00 a month in long-term disability benefits, and your provided with the maximum amount of CPP disability available, or $1362.30, then your long-term disability carrier would provide you a direct deposit or cheque at the start of the month for $2237.70.

In addition, if you have been receiving long-term disability benefits for quite some time, then your retroactive payment from CPP needs to be payable to your long-term disability carrier. It’s important that you do not spend this money and provide it to your long-term disability benefits insurance company.

Have you been denied long-term disability?

If you have been denied long-term disability please fill in a contact form or call our disability lawyers at 905-333-8888. We are long-term disability lawyers serving on claimants all over Ontario.  We represent people with all kinds of disabilities – both from a chronic illness or serious injuries that prevent them working. We handle claims at all stages of disability benefits. We understand that when an insurance company denies your disability payment, you and your family can suffer major financial losses. When you hire our disability firm, you and your family will receive personal attention and focus on your case. Your case is personally handled by a lawyer, and not a paralegal. We provide constant communication, answer all of your questions, phone calls and ensure that you and your family is taken care of.

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