Difference Between CPP Disability and Long-Term Disability

Difference Between CPP Disability and Long-Term Disability

Can I collect CPP disability and long-term disability? Long-term disability and CPP disability can be confusing for many claimants. Most people aren’t sure if they are entitled to both benefits and how much they can collect for each. This article will break down CPP disability and LTD benefits for you. 

What is CPP Disability?

Canada Pension Plan (CPP), also known as CPPD, is a monthly payment that you can receive if disabled to replace your lost income. For you to receive CPP, you must:

  • Be under 65 years
  • Have made contributions to the Canada Pension Plan
  • Suffer a mental or physical disability that is severe, prolonged, or likely to result in death

Under CPP legislation, you must prove that your mental or physical condition is 

a) Severe: The condition makes you “incapable of pursuing substantially gainful occupation.”

b) Prolonged: The condition is likely to continue for an indefinite duration or likely to result in death.

Additionally, you must have made contributions to the CPP in 4 of the last 6 years in order to qualify for benefits or 3 of the last 6 years if you have contributed for more than 25 years. 

CPP and Children’s Benefit

CPP benefits may be available to dependent children. Dependent children can only receive CPP benefits if they are under the age of 18 or between 18 and 25 and in full-time attendance or at a recognized school/university. Only children of a disabled contributor are eligible for the children’s benefit. Children of a deceased contributor may also receive a monthly CPP payment. The child may also be legally adopted or in the custody of a disabled contributor. 

What Happens When You Turn 65?

If you turn 65 while under CPP, your benefits will automatically be changed to a CPP retirement pension. This means that any post-retirement disability benefit you were receiving will stop. Typically, the amount you will receive as a retirement pension will be lower than your disability benefit.

How to Apply for CPP

If you have a physical or mental condition that prevents you from working regularly at any job, you should apply for long-term disability CPP. Your CPP application is likely to be successful if the medical condition is long-term and of unknown duration or likely to result in death. In most cases, you will receive a response for your CPP application within a maximum of 120 days. You can receive a response faster by making sure that your application is complete and all required documents are provided during the initial submission. With the help of a disability lawyer, you can navigate the CPP application process and increase your chances of getting approval.

How CPP Applications are Assessed Before a Decision is Made

First things first, your application will be reviewed to check if you met the minimum eligibility criteria for CPP. That is, if you have not made enough contributions to the Canada Pension Plan or are above age 65, your application will immediately be denied. 

If you have made enough contributions to CPP, your file is then passed to medical specialists for an assessment to be done. The medical experts are not looking for a diagnosis alone. There are several factors that will be considered to determine if your condition is considered a long-term disability. This includes:

  • The severity and nature of your mental or physical condition
  • The impact the condition has made on your capacity to work
  • The treatment sought and how it has impacted your ability to work
  • The likely cause of the condition
  • Your age and work history
  • Your previous occupation – the number of hours you worked, your earnings, etc.

Can You Get CPP if Your Medical Condition is Short-term or Temporary?

You can only be eligible for CPP if your medical condition is considered long-term. If you are suffering from a short-term or temporary physical or mental condition, you will not be eligible for CPP disability benefits. There are other benefits you can pursue, such as the Employment Insurance Sickness. 

What is Long Term Disability?

Unlike CPP, long-term disability is not sponsored by the government. LTD is offered by insurance companies through either a private individual policy or a group plan issued by an employer or association. Many Canadian employers offer their staff group long and short-term disability coverage as part of their employment benefits. Persons can also purchase their own disability income policy to supplement an existing group plan from their employer or access coverage if the group plan is not available. 

Common Differences Between Group and Individual Disability Policies

Group disability is tied to your employment which means that if you change or lose jobs, the coverage may stop. The cost of group policies often changes year after year. Another major advantage of group coverage is that it’s likely to cover all eligible employees regardless of their health. 

Individual policies, on the other hand, are more expensive. You are likely to pay higher premiums than what an employer is paying for its employees to access the same coverage. However, with an individual policy, you can access better benefits depending on how much premiums you are willing to pay. If you change jobs, your disability coverage continues. You may be denied coverage due to a health condition.

Also, note that both individual and group policies may have a pre-existing provision that will deny you long-term disability benefits if you have any disabling condition that begins within your first 12 months of coverage and the condition is because of the pre-existing condition, whether directly or indirectly. A pre-existing condition refers to any medical condition where you received treatment or were attended by a doctor for a certain amount of time before the effective date of coverage.

What is the Elimination Period in Long-term Disability Coverage?

Your long-term disability policy will have a waiting period or elimination period, which prescribes the time the claimant must be disabled before they are eligible for benefits. Most LTD policies offer an elimination period of 60, 90, 120, or 180 days. If your plan includes a short-term disability component, the elimination period is designed to ensure that when the short-term disability benefits cease, the long-term benefits begin. 

When to Apply for Long-term Disability

Even though you only qualify for long-term disability once the elimination period ends, as disability lawyers in Canada, we advise our clients to apply for benefits before the end of the waiting period. Applying before the elimination period ends gives you enough time to gather all medical records, get a complete review and documentation from your attending physician and allow the insurance company to review your claim and ask for any additional information they would require.

What is Totally Disabled in a Long-term Disability Claim?

Long-term disability policies will have a clause of total disability. The injured party is deemed totally disabled if he/she is unable to complete the substantial duties of their own regular job. The total disability definition is likely to change after a certain period, typically 24 months. This is known as the change of definition. Once the definition changes, the insured will only be considered totally disabled if they are unable to complete any occupation, which they are reasonably qualified to perform by virtue of their education, training, or experience. In short, you will not qualify for long-term disability benefits unless you are totally disabled from working any job which you are educated or trained adequately to complete.

Which Conditions Qualify for Long-term Disability?

There are many mental and physical conditions that may lead to long-term disability. Some of the common ones include:

  • Cancer and malignant neoplastic diseases, e.g., lymphoma, tumours, leukemia, multiple myeloma
  • Immunity disorders, nutritional & metabolic diseases such as gout, malnutrition, diabetes, obesity, thyroid gland disorders
  • Skin disorders such as chronic skin diseases, burns, cellulitis, dermatitis, lymphedema
  • Hematological disorders such as sickle cell disease, aplastic anemia, spleen diseases
  • Genitourinary impairments such as cervicitis, endometriosis, kidney, and bladder disorders
  • Infections and parasitic diseases like HIV/AIDs, meningitis, Tuberculosis, Hepatitis B/C
  • Digestive disorders such as Crohn’s disease, gastritis, irritable bowel syndrome
  • Cardiovascular disorders such as heart attack, congestive heart failure, hypertension, stroke, recurrent arrhythmia
  • Respiratory disorders such as asthma, influenza, pneumonia, breathing disorders
  • Mental disorders such as anxiety, bipolar disorder, depression, drug addiction, panic attacks, mood disorders, PTSD, schizophrenia 
  • Autoimmune disorders like lupus
  • Neurological disorders like Alzheimer’s Disease, dementia, epilepsy, TBI, paralysis
  • Musculoskeletal disorders like severe back pain, arthritis, fibromyalgia, and amputation

Are LTD Benefits Reduced by CPP Benefits?

The short answer is yes. If you have been receiving CPP benefits, your long-term disability benefit payment will be reduced by the amount of CPP you’ve obtained. For instance, if you’ve received monthly long-term disability payments of $2400 and you still receive CPP benefits worth $1362, the insurance company may send you only $1,038 at the start of the next month.

5 Major Differences Between LTD and CPPD Benefits

Is CPP disability permanent? As a top disability law firm in Canada, we get a lot of questions regarding the difference between long-term disability and Canada Pension Plan disability benefits. While the two may appear to have many similarities, they have distinct features which you should be aware of. Understanding the difference between CPPD and long-term disability benefits will help you know what to apply for and what happens when you don’t. Here are 5 things you should know about CPP and LTD benefits.

1. Qualification criteria for CPPD and LTD are very distinct

To qualify for CPPD payments, you must have contributed to the government pension plan for a specified number of years consistently. Additionally, you will only receive CPPD benefits if you satisfy that the condition you have is severe and prolonged. On the other hand, long-term disability benefits are offered by insurance companies and not government agencies. LTD benefits can either be included in your employee group plan at work or as part of a privacy policy that you purchased as an individual.

2. Your CPPD benefits affect how much LTD your insurer pays

Your insurance provider may ask you to apply for CPPD as part of the eligibility for LTD benefits. This is because the CPPD benefits you receive will affect how much long-term disability benefits you’re paid every month. This will only happen if your LTD policy has a provision that stipulates that the insurer can get a credit for any CPPD benefits you receive. CPPD typically reduces the insurance company’s obligation to pay the full LTD benefit amount. You will receive both benefits, but the amount of LTD benefit you receive will be less your CPPD.

3 . You may have to apply for CPPD before claiming LTD benefits

Many people facing disabling symptoms that limit their ability to work often wonder if they need to apply for CPPD and LTD at the same time. It is highly recommended that you apply for both CPPD and LTD. 

Reasons to apply for both LTD and CPPD

For starters, once you get approved for LTD benefits, the insurance company can estimate how much you would have received if you had applied for CPPD and deduct this amount from your monthly payment.

Secondly, your insurer may deny you LTD benefits by stating that your failure to apply for CPPD was a breach of your contractual obligations. You may end up not receiving any LTD payments altogether. Even though a disability lawyer can challenge such a denial, it is important for you to minimize the risk of losing LTD benefits by applying for CPPD.

Additionally, a successful CPPD application can help to strengthen your application for long-term disability. It would be difficult for your insurer to argue in future that you do not have a disability that prevents you from working since the federal government has already reviewed your documentation and considered your condition to be severe and prolonged. 

Lastly, when your application for CPPD is approved, it gives you the financial assistance you’ll need in case anything happens with your LTD benefits. There are cases where your insurer can simply deny your LTD benefits or cut them off after a while. Your disability lawyer can challenge this decision, but it’s still a risk to keep in mind.

1. A denied CPPD application doesn’t affect your LTD payments

If you applied for CPPD and it was rejected, you may choose not to appeal, especially if your LTD application is approved. The denied application means that your insurance company will not reduce the LTD benefits you receive by any amount you would have received as CPPD if your application were approved. In fact, if your LTD payments are cut off because your CPPD application was rejected, speak to our disability lawyer immediately, as this is illegal and unfair.

2. Hire a lawyer if your LTD claim is denied

Even if you’re struggling with a disabling condition, you have more power than you think. With the help of a disability lawyer, you can force an insurance company to meet their contractual obligations – pay you the benefits that you are owed. Many insurance companies want to avoid fighting legal battles. Some insurance adjusters will prey on their claimant’s fears by forcing them to give up their rights to appeal a denied claim so they can avoid paying what is owed. 

As a reputable disability law firm in Canada, we know it’s not hard to resolve a claim that has been incorrectly denied. We have resolved these types of claims for many years and dealt with the largest insurance companies in the city. We don’t ask our clients for a retainer. We only get paid after we have successfully gotten a settlement from the insurance company. Our lawyer will take over all communication with the insurance adjusters, so you can continue to focus on getting better. If you are facing a disabling condition and have been denied benefits, the only thing you need to do is contact our disability lawyer.

Why are Long-term Disability Benefits Denied?

Even if you’ve been diagnosed with a disabling condition, your claim may still be denied. This can be an overwhelming process, especially if you’re facing a huge financial burden from being off work. Don’t give up. You can still appeal a denied long-term disability claim. In fact, research shows that only 44% of claimants who apply for long-term disability benefits are successful on the first try. If you’ve been denied long-term disability benefits by your insurance company, contact a disability lawyer in Canada immediately.

A denial doesn’t reduce your chances of getting accepted the second time, but it would mean that you have to undergo the often-complex appeals process. Keep in mind that the insurance adjuster’s goal is to deny you benefits to maximize their profits. That’s why many legitimate claims are turned down the first time. Additionally, many of these insurance providers know that only a few people seek legal help to appeal the decision. Many claimants give up on the process, especially due to the burden that comes with being disabled and losing your income at the same time. The good news is that you can get an experienced long-term disability lawyer to handle the appeal process for you.

A disability lawyer will take time to assess your unique situation and try to understand why your claim was denied in the first place. The lawyer will then determine how to file a strong appeal by gathering the required documents and statements that prove your disability and dealing with medical experts and insurance adjusters on your behalf.

Below are some common causes of denial that your disability lawyer can assess:

  • Lack of adequate documentation to prove your disability 

Your insurer expects more than just the diagnosis to substantiate your disability claims. You must present adequate depth that not only shows you have disabling symptoms but that your condition, whether mental or physical is severe and prolonged. Anything missing from your medical records may result in a denial. 

Your disability lawyer will review your initial claim and ensure that the evidence of your disability is as comprehensive as possible. He/she will ensure that your claim has a high chance of success from the start by providing sufficient evidence of your disability, which includes medical records, professional opinion, independent medical exams done by experts other than your treating physician.

  • If there is evidence that you are still capable of working

Another common reason insurance companies deny long-term disability claims is when they perceive the claimant’s condition to be less severe than portrayed and claim that he/she can still work. You may have submitted some information as part of your claim that shows you are still capable of working. Additionally, insurance companies also hire their own investigators to obtain evidence that your condition is not as disabling as you portray and that you can still work. For instance, the investigators may try to see whether you’re still engaged on social media or other activities that show you should be able to work.

When you work with a long-term disability lawyer, you challenge such evidence from investigators who have used unacceptable tactics to challenge the severity of your disabling symptoms. Your lawyer can challenge the findings of these insurance investigators and work to prove that you cannot work due to your condition. Additionally, your lawyer will advise you on what activities you must avoid while your claim is pending, such as being active on social media. 

  • Errors in your LTD application

It’s quite common for first-time LTD applicants to submit their applications with errors resulting in a denial. For someone dealing with a disabling condition, there’s a lot in your mind. You might fill in the application in a hurry since you want to receive the benefits as soon as possible. However, even the slightest errors in your application can cost you to miss out on the benefits you are entitled to. When you seek the right legal help, you can avoid these errors and increase your chances of approval.

Errors in your application for long-term disability in Canada can be easily rectified when you’re working with a lawyer. When you approach a disability lawyer to assist you in filing an appeal, he/she will review your application and identify errors that could have led to the denial. 

How to File an Appeal for Long-term Disability Denial

No matter the reason your long-term disability claim was denied, you will have to file an appeal if you still want to access the benefits owed to you. There are strict deadlines and complex procedures for filing an appeal for long-term disability denial. To have the best chances of success, contact a disability lawyer immediately after you receive a denial. You will get the guidance to comply with all the requirements of the appeals process.

What to Expect from Your Long-term Disability Lawyer?

Your lawyer will request an initial consultation with you in order to assess your claim. The next step is to gather all the evidence and information that supports your disability status. Once your lawyer has this, he/she will then request your insurer to reassess the claim based on any new information presented. If your disability eligibility is questionable, your lawyer will work with the reviewer to ensure that all the information requested is provided. If the reconsideration is still not successful, your lawyer will then escalate the appeals process until you receive the benefits owed. 


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