We often encounter confusion from people regarding LTD vs. CPP, and we hope to clarify the differences with some quick points.
General - LTD vs. CPP
LTD is private insurance available through Group Insurance Benefits, usually through a workplace, or group association or by purchasing a private policy from an insurance company, while disability benefits from the Canada Pension Plan (CPP) are government-sponsored and administered benefits available to all Canadians who make contributions into the plan, usually through source deductions from your pay cheque.
Is CPP Deductible form LTD?
Most Group LTD policies provide for CPP benefits to be deducted from the gross amount they are required to pay. Many insurance policies say they can estimate the amount you are entitled to and deduct the amount if you never apply for the benefit, so you should apply for them if you’re on LTD, in most cases.
Taxable or Non-Taxable?
LTD benefits can be taxable or non-taxable depending on the policy or plan was set up. CPP is a taxable benefit whether LTD is taxable or not.
How is Disability Defined?
Under most LTD policies there is a period when benefits are paid based on disability from your own occupation, followed by a period where it is based on disability from any occupation. Under CPP guidelines, you must be suffering from a severe and prolonged disability (not likely to return to gainful employment in the foreseeable future).
These are some of the major differences between LTD vs. CPP. In some cases, the interrelationship between the LTD industry and the CPP rules can be confusing and it may be difficult to know whether your insurance company is handling potential to CPP entitlement correctly.
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A note from our long term disability lawyers
Taking a medical leave from work is not an easy decision to make. Concerns about providing for yourself and your family and keeping your job may cause you to want to push through your pain, but this won’t make your problems go away. Stopping work is often the smartest decision for your long term health and well-being, and your disability benefits are there to provide you with financial support until you can return to work.
If you have made the tough decision to stop working and apply for your short term disability or long term disability benefits, you may feel overwhelmed by the process and have questions that your employer and your insurance company are not able or willing to answer. Share is There to see you through and answer your questions.
Our Disability law firm knows what you have been going through
We understand that things have not been easy for you over the last little while. Your health has been suffering, you are unable to work, and now your insurance company, who was supposed to be there in your time of need, has decided they will not pay your disability benefits or respect your disability claim. These benefits exist to provide you with the financial support you need so that you can focus on your health and rebuilding your life. It is unfortunate that your insurance company has not lived up to its promise. If your disability claim has been denied, we will fight to get you the benefits you are entitled to. Our disability lawyers have helped thousands of Canadians get their long term disability benefits over the past 35 years, and we can help you too.
Our experienced disability lawyers can fight back on your behalf
Share Lawyers believes that every client who is dealing with a disability claim deserves superior personal service. To achieve that goal, we have developed our team of experienced, compassionate, and caring long term disability lawyers, law clerks, and administrative staff to meet all of your needs. Our team of experienced long term disability, life insurance, employment, and critical illness insurance lawyers have made successful claims against many insurance companies, third-party administrators and employers.
If you are unable to work, your disability benefits should be there to provide you with the financial support you need. While your insurance company may be focused on finding ways to avoid paying your claim, our focus is on what is in your best interest. When Share Lawyers gets involved, you have an entire team of lawyers that are there to support you and to fight for what is yours.
Our disability claim lawyers fight for your disability insurance claim by relying on our many years of experience to apply the best strategic planning and approach in each case, using the latest technology available. Experience matters, and with Share Lawyers, you are in the best hands with 35 years of success on your side.
In this video, we explain the role of a long term disability lawyer and how we can support you when you have been denied your long term disability benefits.