If a serious medical condition prevents you from performing the duties of your job and you are no longer able to earn a living for a significant period of time, long-term disability benefits could provide you with a degree of financial security. But in certain situations, you may be required to return long-term disability payments to your insurance provider.
If you receive long-term disability benefits from both an insurance company and the Canada Pension Plan (CPP), you may have to pay back some of the compensation you received from your long-term disability insurance provider. Even though you are allowed to collect benefits from both sources, CPP benefits are designed to offset the amount of benefits payments supplied by your insurance company, rather than provide you additional revenue.
If you begin receiving CPP benefits after collecting long-term disability payments for some time, you may be required to retroactively repay the excess amount to your insurance company. In most cases, once you are approved for CPP benefits, a retroactive lump payment may be made to you. Under those circumstances, the insurance company will be looking to be repaid for the period of time that the retroactive CPP payment is made.
Additionally, if you adequately recover from your medical condition and are able to return to the workplace, but do not notify your insurance provider and continue collecting long-term disability payments, you may be required to reimburse the insurance company for those erroneously claimed benefits.
Long-Term Disability Offset Provisions
Long-term disability policies may include offset provisions stipulating that the insurance company is not required to pay eligible benefits recipients for amounts they have already received from the CPP.
If you begin receiving disability benefits from the CPP and your insurance company does not immediately reduce your monthly payment amount to offset those additional benefits, you may be obligated to reimburse them for any overage payments you received.
Understanding Long-Term Disability Benefits
Long-term disability benefits are designed to provide a financial safety net to policyholders who are unable to work for a substantial period of time following a serious medical diagnosis. Generally speaking, these benefits do not become available until employees exhaust all compensatory options available to them, including paid sick days, vacation time, and short-term disability benefits.
In Canada, long-term disability plans generally pay recipients between 60-70% of their regular income. If eligible, this coverage may continue for a certain number of years, or in some cases, until recipients reach the age of retirement.
Call Preszler Injury Lawyers Today
If you have been instructed to pay back long-term disability benefits, Preszler Injury Lawyers may be able to review your situation and provide useful advice. After a thorough review of your insurance policy’s terms, a long-term disability claims lawyer may be able to explain the legal options that may be available to you. Call Preszler Injury Lawyers today at (416) 364-2000 for a free, initial consultation.