What Percentage of Disability Claims Are Denied in Canada

Across Canada, a growing number of people facing life-changing illnesses or injuries find themselves trapped in an unexpected second battle against the system meant to support them. Applying for disability benefits is rarely straightforward. And for many, a denial is the beginning of an exhausting, years-long fight to prove they deserve the help they desperately need.

Millions of Canadians rely on disability benefits to survive when illness or injury prevents them from working. These supports can come from several sources, including employer-backed plans, private insurance plans, federal programs, or provincial initiatives such as the Ontario Disability Support Program (ODSP) or workers’ compensation. But, despite their differences, all these systems share a troubling common thread: many valid disability claims are initially denied, and claimants often face long, confusing delays. For those already struggling physically or mentally, this system can feel more like an obstacle than a lifeline.

Estimating the Denial Rate

Unlike public disability programs, employer-sponsored and private insurers are not required to release data on how often they deny claims. As a result, there's no official denial rate, and that lack of transparency has real consequences for Canadians trying to understand their rights.

Still, some inferences can be drawn. Legal professionals who support clients with disability benefit denials day in and day out often report that the rate of denial in group and private insurance claims is alarmingly high, particularly in the early stages. These cases form the backbone of many disability law practices, suggesting the problem is not isolated but systemic.

In fact, the volume and nature of these claims closely reflect the denial patterns seen in public systems. Public programs have published rejection rates of 57% -- it is not unreasonable to assume that similar forces may be at work in private systems.

The Mental Health Crisis in Disability Claims

Mental illness now drives a significant portion of all disability claims, seeing as an estimated 30% to 40% of all such claims relate to mental illness. Among women, 40% of long term disability (LTD) claims are for mental health conditions, compared to 30% for men. In 2022, over one-third of all disability leaves were related to mental health. For employers, this shift is also a cost issue; although mental illness accounts for only about one-third of claims, it drives 70% of total disability costs. As a result, insurers may scrutinize these claims more heavily, and some believe there is a bias against mental health-related applications. Given that three quarters of employers now cite mental illness as the top cause of both short term and long term disability, the way systems handle these claims will define the future of disability support in Canada.

Private Insurance Statistics

For those with workplace benefits or individual policies, group and private disability insurance can offer vital support. But coverage gaps are growing, and not everyone has access. Today, only 48% of employed Canadians have workplace disability insurance, down from 57% in 2015. Among those without workplace coverage, 84% have not purchased private disability insurance. Despite these gaps, disability payouts are rising. In 2023, Canadian insurers paid out nearly $10 billion in disability benefits: a record high. Still, that safety net has limits. Employment Insurance (EI) provides only short term coverage, and 36% of EI sickness claimants used the full 15 weeks of available benefits, after which they must turn to other sources if available.

Fear of Disclosure: A Quiet Risk

Stigma around disability still runs deep in Canadian workplaces. Many employees living with chronic conditions or emerging health issues choose to stay silent, worried that disclosing their struggles might lead to judgment, reduced opportunities, or even job loss.

In one survey, 45% said they felt uncomfortable requesting accommodations, while 36% wouldn’t disclose their needs at all. In many workplaces, these fears are justified, as subtle forms of discrimination, stalled career growth, or being perceived as “less capable” remain common experiences after disclosure.

That silence can come at a cost. When a condition worsens and a claim is filed, insurers often look for a paper trail. Without past documented accommodations or requests for support, they may question the legitimacy of the disability, even when the need is real.

This creates a paradox: workers who try to manage quietly, out of a desire to remain independent or avoid stigma, may find themselves penalized later for not having asked for help sooner. Trying to tough it out may feel like the safer option at work, but it can make securing benefits much harder down the line.

Denied? Your Case Isn’t Over

When your claim is denied, you still have options, though they aren’t always straightforward. Most insurers offer an internal appeal process, where a second team reviews the file. But legal professionals say these reviews rarely reverse the original decision.

That’s where legal action becomes crucial. Many claimants don’t realize that a denial is the beginning of a different process. Lawyers who specialize in disability claims often report that insurers are more willing to settle once a lawyer files a lawsuit against them. The reason? Bringing cases to court risks exposing internal decision-making processes that insurers would prefer to keep private.

So even though official denial numbers are hard to come by, the legal pattern is clear: many claims that were rejected early on are later approved through settlement. That reality underscores a deeper issue; namely a system that denies first, and only considers approval once a claimant hires a lawyer and pushes back hard enough.

Conclusion

The picture painted by these statistics is clear. Canada’s disability benefit systems are difficult to access, slow to respond, and quick to deny. The rate of disability claim denial in Canada remains high. Appeals are backlogged. Processing times are long. And even after a successful claim, claimants may be reassessed and lose their benefits. Mental health, now the leading cause of long term disability claims, remains especially vulnerable to denial and delay. Meanwhile, fewer Canadians have access to disability insurance through work, and most don’t purchase private coverage. For the many who depend on these benefits to live, the human cost is immense. Reform to this system has now become a matter of justice, dignity, and support for those who need it most, as opposed to a mere bureaucratic system.

You Don’t Have to Face This System Alone

If you’re reading this, chances are you've experienced how broken Canada’s disability claims system can be. Long delays, wrongful denials, and overwhelming paperwork are just some of the obstacles that stand between you and the support you need, often when you’re already at your lowest.

At Share Lawyers, we understand the frustration and fear that comes with being denied the benefits you rightfully deserve. For over 35 years, we’ve stood beside people just like you; individuals facing life-altering injuries or illnesses, trying to navigate an unforgiving system.

You’re not alone. When you work with us, you can count on:

- A free consultation, and no fees unless we win.
- Experienced, honest legal support: we’ve been helping Canadians with denied disability claims since 1987.
- Always accessible: no matter where you're located, we make it easy for you to stay in touch. You can schedule a consultation via phone, text, email, or video conferencing.
- Clear answers: we explain your options, not just what you want to hear.

Our team will help you navigate the process and fight for the outcome you deserve. Call us now at (866) 964-9792 or fill out our free consultation form to get started. The sooner we’re on your side, the sooner you can focus on what matters most: rebuilding your life.

The statistics and facts in this article are based on available data as of the publication date. While efforts have been made to ensure accuracy, details can change over time. This content is, therefore, for informational purposes only and should not be used as professional advice.