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Will My Disability Benefits Change When I Turn 65?
Turning 65 is a big milestone for most Canadians. For many, it marks the start of retirement.
But if you’ve been receiving long term disability (LTD) benefits from your job, you might be wondering: what happens to those benefits when you reach 65? Will they keep coming, get smaller, or stop completely?
Summary: Key Points to Remember
Most LTD benefits end at age 65.
Check your policy for exceptions.
Plan ahead for the transition to retirement income.
Apply for government benefits like CPP, OAS, and GIS.
Look into other support programs if needed.
Consider talking to a financial advisor or lawyer for help.
Let’s look at what usually happens, what you can do to prepare, and how someone just like you handled the transition.
Meet Jean: A Real-Life Example
Jean is 64 years old and lives in Thunder Bay. She worked as an administrative assistant for over 25 years before a chronic illness forced her to stop working eight years ago.
Since then, she has been receiving long term disability (LTD) benefits through her employer’s insurance plan. Jean’s doctors have told her she is unlikely to return to work, so she has focused on managing her health and staying connected with her family and friends.
Now, with her 65th birthday just a few months away, Jean is starting to wonder what will happen to her disability benefits. She has heard that many LTD plans end at age 65, but she’s not sure what that means for her.
Jean is worried about how she will pay her bills and manage her health expenses if her benefits stop.
Stories like Jean’s are all too common. Many Canadians face the same questions and concerns as they approach 65 and prepare for the end of their LTD benefits.
Understanding Long Term Disability Benefits
Long term disability (LTD) benefits are payments from an insurance company if you can’t work because of a serious illness or injury.
Most LTD plans pay you between 60% and 70% of your regular salary, up to a certain maximum.
Your benefits may be taxable if your employer paid the premiums, or tax-free if you paid for the insurance yourself.
LTD benefits are meant to help you until you can return to work or until you reach a certain age; usually 65.
Some plans also offer partial benefits for employees who can return to work in a reduced capacity, which may be relevant to you if you are transitioning to retirement.
What Happens to Disability Benefits at 65?
Most LTD plans are set up to stop payments when you turn 65. This is because most people retire around that age, and government pensions and other income sources become available.
However, some plans are different. With more and more Canadians working past age 65, there are a few plans that make LTD benefits available until you are 67 or even 70.
It’s always a good idea to check your own plan to see what happens at age 65.
For Jean, this means she needs to find her LTD policy and read it carefully. She should look for the section that explains when benefits end.
She can also contact her former employer’s HR department or the insurance company directly to ask about her specific plan.
Do STD and LTD Disability Benefits Change at Age 65 in Canada?
Yes, both short term Disability (STD) and long term Disability (LTD) benefits often change or end when you reach age 65.
Here’s what typically happens:
Short Term Disability (STD) benefits aren’t usually affected, since they are already short term and only last for a few months;
Long Term Disability (LTD) Benefits: This is where the big change happens. Most disability benefits stop at 65 in Canada. This is typically a contractual condition within the policy itself. However, some newer or customized policies may extend benefits up to age 67 or even 70, as more people remain in the workforce longer.
LTD Benefits - Do They Stop at 65?
Here’s a quick comparison chart to understand how different elements of disability benefits interact before and after age 65.
Income Source | Before 65 | After 65 |
Long term Disability | Yes | Typically ends |
Short term Disability | Possibly, for 15–26 weeks | Not applicable |
Employment | Often not working due to disability | Retirement phase |
Personal Savings/Pension | Optional | Primary income source |
When you’re getting long term disability (LTD) benefits, other types of income - like pensions or government benefits - can sometimes change how much you get. This depends on what your policy says.
A lot of LTD plans have what’s called an “offset” rule. This means if you start getting money from sources like the Canada Pension Plan (CPP), Quebec Pension Plan (QPP), or Workers’ Compensation, your LTD payments might go down by that amount.
The insurance company does this so you don’t get paid twice for the same loss of income.
Here’s some good news: usually, your company pension won’t reduce your LTD benefits unless your policy specifically says it will. That’s why it’s important to read your policy and pension documents carefully.
Also, if your LTD plan is “pension-approved,” you might keep building up pension time while you’re on disability, which could help your pension grow. If not, your pension will probably stay the same as when you first went on disability.
One more thing to know: some LTD benefits are taxable, especially if your employer paid for your insurance. If you paid the premiums yourself, the benefits are usually tax-free.
It’s always a smart move to talk with a financial advisor to help you understand how these changes will affect you, especially as you get closer to 65.
Can I Extend My Disability Benefits Beyond Age 65?
Not usually. While it may be possible in rare cases, it depends entirely on how your policy is worded. Most standard policies end long term disability benefits. Be sure to review your LTD policy carefully.
Purchasing New LTD Insurance After 65
Obtaining new LTD insurance after age 65 is extremely difficult.
Most insurance companies don’t offer new long term disability (LTD) policies to people over 65. The main reason is that older adults are seen as a higher risk, so the cost for insurance goes up. Even if you do find a company that offers this kind of coverage, the monthly payments (called premiums) will usually be much higher.
Plus, the benefits might not last as long, and you might have to pass some tough health checks.
If you’re worried about money after you turn 65, you could look into other types of insurance, like critical illness or long term care insurance. These options can help with certain costs, but they don’t work the same way as LTD. They usually don’t replace your regular income like LTD does, but they can help cover things like medical bills or care if you get sick.
How to Prepare for Your LTD Benefits Ending at Age 65
Let’s go back to Jean. She is feeling a bit overwhelmed, but she knows she needs to take action. Here’s what she decides to do:
- Review Her LTD Policy
Jean finds her LTD insurance policy and reads it carefully. She looks for the section that explains when benefits end.
She contacts her former employer’s HR department and the insurance company to ask about her specific plan.
- Plan for the End of LTD Benefits
Jean makes a list of her monthly expenses and sees how much money she will need after her benefits end.
She starts to budget for the transition.
- Apply for Government Retirement Benefits
Jean applies for the Canada Pension Plan (CPP) retirement pension. She can do this online or by mail.
She checks if she is eligible for Old Age Security (OAS) and the Guaranteed Income Supplement (GIS), which help low-income seniors.
- Look Into Other Support Programs
Jean asks her doctor and her local community center about any provincial or local programs for people with disabilities or seniors.
She finds out she might be eligible for help with prescription drugs, home care, or other services.
- Consider Alternative Insurance
Jean investigates other types of insurance, like critical illness or long term care insurance.
- Seek Advice if Needed
Jean is still concerned, so she decides to talk to a financial advisor and a lawyer who knows about disability rights.
She also contacts organizations that help seniors for advice and support.
Legal Options If Your Benefits Are Cut Off Too Early
If your benefits are cut off before age 65 and you think the insurance company made a mistake, you can challenge the decision.
It’s a good idea to speak to a lawyer who knows about disability benefits to understand your rights.
How Our LTD Lawyers Can Help
Turning 65 is a big change, especially if you’ve been relying on LTD benefits. By preparing early and knowing your options, you can make the transition smoother.
At Share Lawyers, we specialize in helping clients understand and fight for their disability rights.
If you're unsure about how your benefits will be affected, if you think your insurance company has made a mistake, or have questions about your rights, contact us for a free consultation.
We'll help you understand your options and fight to ensure you receive the benefits you're entitled to.
Frequently Asked Questions
Q: Can I work part-time and still get LTD?
A: Some plans allow you to work part-time and still receive partial benefits, but this depends on your policy.
Q: What if my disability started after I turned 65?
A: Most LTD plans do not cover disabilities that start after 65, but it depends on your policy.
Q: How do I know if my policy has an exception for age 65?
A: Check your policy or ask your employer or insurance company.
Q: What if I’m still working past 65?
A: Most LTD plans still end at 65, even if you keep working.
Q: How do I apply for government benefits?
A: You can apply for CPP, OAS, and GIS online or by mail.
Q: What should I do if my claim is denied?
A: You can appeal the decision or get help from a lawyer.
