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Long Term Disability vs Canada Pension Plan Disability – What’s The Difference?

by | Jun 7, 2022 | Legal

A term that often comes up in our line or work is Canada Pension Plan Disability (CPPD). People want to know what it is and how it affects their long-term disability claim.  This is causing people who have recently submitted an LTD claim to question if that was the right decision. People often ask if long-term disability and Canada Pension Plan Disability are the same thing. To put it simply, the answer is no.

Keep reading to learn the key differences between long-term disability and the Canada Pension Plan Disability and which may be the right option for you.

canada pension plan

The Canada Pension Plan (CPP) provides a financial benefit to an individual or to a family who meet the qualifying circumstances. This means there are specific criteria that have to be met to be able to apply (we have referenced this below).

The disability benefit is a taxable, monthly payment that works as income replacement. It is available to people who have 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.

Long-term disability is a term that is thrown around a lot. It is used to decide if someone is eligible for specific benefits within a policy. There are certain criteria a person must meet to qualify for long-term disability. Some of these criteria include:

  • You should have been actively employed at the time of the injury and became unable to work due to the disability.
  • The disability must be serious and long-lasting, meaning you are no longer able to do the duties of your job – or even modified duties – making you incapable of working at your job or any other job for the time being.
  • The disability must last a minimum of three months.

Every claim is different, and every individual has their own story and experience to tell. Our job is to listen and help make sure you get the justice you deserve. There are a variety of reasons people submit a claim or come to us for help. If you are unsure and would like more advice, please book a free consultation.  

What is the Canada Pension Plan Disability (CPPD)?

CPPD is a federal government program designed to provide partial income replacement to individuals who suffer from a severe and prolonged disability.

  • You can read more about the program through the federal government’s website here.
  • The qualifying criteria for CPPD can be found here.
  • You can also review the process

What if I’m also getting LTD benefits?

CPPD is almost always deductible from long-term disability (LTD) benefits to the benefit of the insurance company. There are several reasons why it is very important for you to apply for Canada Pension Plan Disability even if you are receiving long-term disability benefits. Most long-term disability policies require you to apply for CPPD. If you do not apply, the insurer could have the right to deduct the benefits that were estimated to you. This means they could come back and take this money at any time.

If my CPPD application is approved, does that mean that I get CPPD plus LTD?

No. Your LTD benefits will be reduced by whatever amount you received. Many people believe they could qualify for long-term disability benefits through Canada Pension Plan. Here are some common questions we get asked:

How does the CPP define disability?

The government defines disability as “severe” and “prolonged” and must keep a person from returning to work on a regular basis or is likely long-term and may lead to death.

How can someone apply?

A person who wishes to apply must fill out an application form, which they can receive through Service Canada. The form includes application forms for the applicant and any dependents, a questionnaire, a medical report to be filled out by a doctor, a consent form, and a child rearing provision form.

How do I know if I’m eligible?

Disability benefits are for people under 65 years of age, those who had to quit work because of a medical condition and who paid into the Canada Pension Plan four of the last six years, or those who paid into the plan for 25 years and made contributions for three of the last six years.

How long does the approval process take?

Generally, the Canada Pension Plan will render a decision within 120 days, or within 48 hours if the applicant is terminally ill.

How much will I receive?

This completely depends on your individual case and varies for everyone.

When should I apply for CPP Disability benefits?

When the possibility of returning to work is extremely low, it may be appropriate to wait for several months and even as much as a year or so before applying for CPPD, since it can be difficult to establish a “prolonged” disability based on only a few months of treatment records.

What if my claim for CPPD benefits is denied?

If your CPPD application is denied, you have an opportunity to appeal the decision by supplying additional medical information in support of your claim. In my law practice, I have frequently seen CPPD benefits awarded after an appeal. I often handle these appeals for my clients’ free-of-charge because I want to ensure that they have the financial support they need while we are engaged in litigation with their LTD insurer.

Do my LTD payments stop if my CPPD application is denied?

No. Your LTD should not stop if you are disabled from working and your doctors support you being off work. The fact is that many CPPD applications get denied, for various reasons.

Some CPPD applications are approved on appeal, but regardless, your LTD should not stop just because your CPPD application has been denied. LTD and CPPD are different processes, and your LTD insurer should not use your CPPD denial as a basis for denying your LTD claim or stopping payment of your LTD benefits. If that happens, you should contact us immediately for assistance.

If you want to learn more about long-term disability and Canada Pension Plan Disability claims, or need help applying to CCPD, please contact us today and we can make sure you have all the tools you need to submit your application.

If your claim has been denied and you need help with an appeal, book a consultation today!

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