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Short Term vs. Long Term Disability in Canada: Understanding the Key Differences
When faced with an illness or injury that prevents you from working, disability benefits can provide much-needed financial relief. However, understanding the differences between Short Term Disability (STD) and Long Term Disability (LTD) in Canada is essential for making informed decisions about your coverage and claims.
Below, we break down the key differences between these two benefits, including eligibility, coverage periods, and waiting times, so you know what to expect.
What is Short Term Disability (STD)?
Short Term Disability benefits provide financial assistance when an illness or injury prevents you from working for a temporary period. These benefits are typically offered by employers through group insurance plans.
Key Features of STD through an insurance company:
Duration: Usually covers you for 3 to 6 months, though some plans extend up to a year.
Coverage Amount: Typically replaces 50% to 100% of your income, depending on your policy.
Eligibility: Requires medical documentation proving that you are unable to work due to illness or injury.
Source of Benefits: Provided through employer-sponsored insurance plans. Some individuals may qualify for Employment Insurance (EI) sickness benefits as an alternative.
What is Long Term Disability (LTD)?
Long Term Disability benefits are designed for those who are unable to work for an extended period due to serious medical conditions. These benefits usually begin after STD benefits or EI sickness benefits run out.
Key Features of LTD:
Duration: Can last for several years or until retirement age, depending on your policy.
Coverage Amount: Typically replaces 60% to 70% of your pre-disability income.
Eligibility: Requires medical evidence that you are unable to perform your job duties. After two years, many LTD policies require you to prove that you cannot work in any occupation suited to your education and experience.
Source of Benefits: Provided through employer-sponsored group plans or private disability insurance. Some individuals may qualify for Canada Pension Plan Disability (CPP-D) benefits as additional support.
Waiting Period for STD and LTD in Canada
Short Term Disability (STD): Usually has a waiting period of 0 to 14 days before benefits begin. The exact waiting time depends on the insurance policy and whether you have sick leave benefits to cover this period.
Long Term Disability (LTD): Typically has a waiting period of 90 to 180 days before benefits begin. Most individuals transition from STD or EI sickness benefits to LTD during this period.
Key Differences Between Short Term and Long Term Disability
Feature | Short Term Disability (STD) | Long Term Disability (LTD) |
Duration | 3 to 6 months (sometimes up to a year) | Several years or until retirement |
Coverage | 50% to 100% of pre-disability income | 60% to 70% of pre-disability income |
Waiting Period | 0 to 14 days | 90 to 180 days |
Eligibility | Unable to work due to illness/injury | Initially unable to perform own job, later any occupation |
Provider | Employer group insurance | Employer group insurance, private insurer, CPP-D |
Which One Do You Need?
If you need income support for a short period (e.g., recovering from surgery or a temporary illness), STD is the best option.
If your condition prevents you from working long term, LTD is essential to ensure continued financial stability.
Many people rely on both types of coverage to transition smoothly from short term to long term benefits if necessary.
Final Thoughts
Understanding the differences between Short Term and Long Term Disability benefits in Canada is crucial for protecting yourself financially in the event of illness or injury. Knowing your policy details, including waiting periods, coverage amounts, and duration, will help you prepare for unexpected circumstances.
If you need assistance with a disability claim, speaking with a legal professional can ensure you receive the benefits you’re entitled to.
Contact Share Lawyers today and let our experience work for you. Our 35+ years of experience can help you win your case against Canada Life, Desjardins, Manulife, RBC Insurance, Sun Life, and other insurance companies. Our legal team offers a free consultation and works on a contingency basis—there are no fees unless you win your case.
