If you are receiving long-term disability benefits in Ontario, you may want to know how income from work will impact what you receive. This extra income may put your LTD benefits and entitlements at risk, depending on what kind of employment it is. If employment conditions exceed the income restrictions stipulated in your long-term disability agreement, this could mean a reduction in your monthly benefit amount.
Here is what you need to know about how you can work while on long-term disability.
Understanding Long Term Disability Benefits in Ontario
Long-term disability benefits are provided to replace income lost due to a disability that prevents the insured from working. They are provided through disability insurance. If you return to full-time work, the insurer may consider this as evidence that you are no longer disabled and may end your claim. If you are earning wages close to – but not as much as – your pre-disability earnings, this could jeopardize an LTD claim.
Types of Disability Policies
Your disability insurance policy will ultimately determine what work options you have available to you.
“Own Occupation” Policies
The Own Occupation definition of a disability states that it’s the inability of an individual to perform essential duties of the job they had prior to the onset of the disability. Even if you are physically or mentally able to work in other positions, if the job you had prior to the onset of your disability is not a job you can perform anymore, you are covered under an Own Occupation policy.
Therefore, if you get a new job and it carries new essential duties that are different from your previous one, partial or total disability benefits will likely not see any change. That is until you reach a certain level of income at which point you may lose your disability status.
“Any Occupation” Policies
Unlike an Own Occupation policy, Any Occupation long-term disability insurance applies to people who cannot work any job. Any Occupation disability is more strict than Own Occupation and often will require more proof of total disability. If the insured is capable of performing any work, even if it’s unrelated to one’s qualifications or work preferences, under such a policy, benefits are likely to be terminated. The criteria is strict.
Most Canadian long-term disability policies have an Own Occupation period of up to 24 months before changing to Any Occupation coverage. This is why many beneficiaries end up having their monthly disability benefits paused or ended, even if it’s a serious injury.
Limits and Restrictions on Disability Benefits
Under Own Occupation long-term disability, there are two key restrictions to be aware of.
- Wages that exceed 70% of your pre-disability income means you no longer meet the definition of disability.
- If combined wages and your monthly disability benefit exceed 100% of your pre-disability income, your LTD benefits will decrease.
Read any insurance policy carefully to ensure terms and eligibility are not violated.
Many insurance policies require periodic reassessments to verify the claimant still meets the eligibility criteria. This is common. If there is a duration limit on your policy or if you’re aware you will have to file for a recurring claim, it is best to give yourself lots of time to do that.
Your Employment Options While Receiving Disability Benefits
Read your policy to see what return to work options you have available. Many policies use a sliding scale. The more you earn, the fewer benefits you receive. In general, if your wages are less than 20% of your pre-disability earnings, your long-term disability income likely won’t be affected.
You may be permitted to work a part-time role or have employment with reduced physical demands while still receiving benefits. There may be a maximum number of hours you can work or a maximum income amount you can earn before it begins to affect benefits. If you intend to work and keep your benefits, stay within these limits.
There may also be a way to gain employment while still receiving disability benefits with job modifications. If it’s your goal to eventually make a full return to work, it may involve employers providing modified duties that accommodate your limitations. Flexible arrangements, such as flexible hours or remote work, can help. As mentioned, any job modifications should align with your disability policy to avoid potential conflicts with your disability benefits.
Partial Disability Payments and Rehabilitation Incentives
Partial disability benefits may be available under some disability insurance policies. They are for beneficiaries who are capable of part-time work but not full-time. This is permitted under some Any Occupation policies and allows you to maintain your benefits.
For disabled persons, it gives them a chance to be earning money in a part time job. Typically, income between 20% and 80% of your pre-disability income will reduce your LTD benefits in proportion to their earnings. You may be required, however, to provide your insurance company with proof of hours worked and wages earned.
Some Any Occupation policies offer a rehabilitation incentive. This is meant to assist disabled people return to part-time work or to encourage them to work in a different job than before. These programs provide vocational rehabilitation training, job search assistance, and professional development. A rehabilitation incentive may also include a 5-10% incentive on top of a beneficiary’s regular long-term disability income without any clawback.
How to Apply for Long Term Disability Benefits in Ontario
There are several types of long-term disability benefits in Ontario. An employer may have long-term disability benefits through a group insurance plan. If you have private disability insurance, they may have their own policies. Many other types of disability benefits exist as well, such as the Canada Pension Plan Disability benefit, Workers Compensation, the Disability Tax Credit, and the Ontario Disability Support program. Eligibility for each is determined differently.
When you apply for long-term disability benefits, your disability is assessed based on either an Own Occupation or Any Occupation standard.
Speak to Your Physician Before Applying for LTD Benefits
To apply for LTD benefits in Ontario, see if you have long term disability coverage under an employer group plan and then speak with your doctor.
Do not leave work to apply for disability before you speak with your doctor and have their support to do so. Your physician will be required in the application to provide comprehensive documentation of your injury and disability, including diagnosis, prognosis, and limitations.
Fill in Application Forms Correctly
After speaking to your doctor, you have to fill in a number of application forms, such as a notice of claim form and a medical report form. Ensure these are filled out completely and accurately. Accurate medical records are essential for any successful long-term disability claim as they are the foundation upon which your application is built. Ensure your application clearly explains how your disability impacts your ability to work and fulfill your job duties.
When submitting an application, you may choose to include a brief cover letter summarizing your circumstances and what is included with your application.
Complete the LTD Interview Process and Follow-Up
After submitting an application, you may be required to do an interview with an insurance company representative who will decide if you are approved or denied. These are often conducted by phone. Be prepared to answer any questions accurately and confidently.
If you are not approved, you may consider hiring a long-term disability lawyer to assist in launching an appeal.
Why Hire a Long Term Disability Claim Lawyer
It’s time to hire a long-term disability claim lawyer if you are having trouble getting your full disability benefits allotment or want to work while continuing to receive disability benefits.
A lawyer can help guide you through the initial LTD benefit application process, ensuring paperwork meets every standard. If you wish to continue working while on long-term disability, we can gather evidence to strengthen your right to work while reinforcing your injury necessitating access to benefits.
Alternatively, if you have already been approved by an insurer and are thinking about returning to work, be sure to read your long-term disability policy carefully to understand how your benefits will be affected. Reach out to a personal injury lawyer with experience handling disability claims at Joshua Goldberg Law and receive a free consultation at no charge.
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