If you receive long-term disability benefits payments, you may receive a notice that your insurance carrier accidentally overpaid the amount owed to you. Oftentimes, overpayments occur when a benefits recipient also receives funds from the Canada Pension Plan (CPP) disability program. In these situations, you may be asked to return overage amounts to your insurance company.
If you do not pay back the overage amount you received, several things could happen, including:
- Your monthly benefit may be reduced
- Your benefits may be stopped or denied, even if you still are unable to work
- Your insurance provider may file a lawsuit against you for the overpaid funds
Circumstances That Require You to Pay Back Long-Term Disability Benefits Payments
It is not unheard of for insurance providers to overpay benefits to eligible recipients and later request these overpaid amounts to be returned. In fact, in the province of Ontario, individuals collecting long-term disability benefits often receive requests to return some of their funding to their insurer.
Typically, individuals may receive this kind of request after they have been approved for CPP disability benefits. CPP benefits claimants may have to wait a period of months—sometimes up to a year—before they begin receiving actual funds, which may then be sent as a large, one-time payment.
Since CPP benefits are intended to offset long-term disability benefits, receiving approval for CPP benefits after already collecting long-term disability payments could require recipients to retroactively repay a portion of their long-term disability benefits back to their insurance provider.
In Canada, long-term disability benefits from all available sources typically only cover between 60-70% of a recipient’s normal salary. After receiving approval for CPP benefits payments in addition to payments issued by your insurance company, you may be legally required to repay some of the money to your insurer.
If you have questions about your policy’s terms, a long-term disability claims lawyer may be able to offer useful assistance and advice.
Legal Options for Repaying Overpaid Long-Term Disability Funds
Generally speaking, there may be no legal way to avoid paying back your long-term disability insurance company, even by filing for bankruptcy.
Insurance companies may have flexible repayment options if you cannot immediately return the overpaid funds. You may be offered a payment plan, allowing you to make small repayments over time, instead of repaying a large lump sum all at once. Insurance companies may be more willing to negotiate a fair repayment plan if you’re represented by an attorney.
Preszler Injury Lawyers Can Guide You Through Repayment Options
If you have questions about payback requirements for overpaid long-term disability benefits, Preszler Injury Lawyers may be able to provide useful assistance and advice. Call (416) 364-2000 for a free, initial consultation on your case.