Ontario's long-term disability benefits: how do you qualify?

Long-term disability benefits in Ontario are governed by certain laws which employees and employers may have to be familiar with. This will help employers guide their employees while in financial distress and help employees return to work at the proper time.

What are long-term disability benefits in Ontario?

Disability benefits are insurance plans that replace a percentage of an employee’s income when they get sick or have an accident that results in a disability. Since the employee cannot work for a period, they will be covered by the disability insurance plan. This could be a short-term or a long-term one.

Since these are insurance plans are considered contracts, the laws on long-term disability benefits are governed by Canada’s common law. This is in addition to federal and provincial laws or disability programs which secure these types of benefits for employees across Canada.

Types of long-term disability benefits in Ontario

Ontario long-term disability benefits are offered by private insurance companies, by the provincial government, or by the federal government.

There are other ways to apply for long-term disability benefits in Ontario. This can be done through a union (when employees are unionized in a company), or through a group plan composed of employees of a particular company.

Private long-term disability insurance companies

While there is no law requiring employers to provide disability programs for their employees, they can arrange for long-term disability benefits with private insurance companies. Employers may even offer insurance plans to their employees when they can.

Workplace Safety and Insurance Board (WSIB)

Established through the enactment of Ontario’s Workplace Safety and Insurance Act, 1997 (WSIA), the Workplace Safety and Insurance Board (WSIB) provides workplace compensation and disability benefits for eligible employees.

The WSIA governs the following, as implemented by the WSIB:

• the types of benefits that an employee may receive in case of a work-related illness or injury
• the process of filing for a claim, including appeals when it is rejected
• the obligations of employers when covered by the WSIA
• the offences that may be committed in relation to the WSIB, and its penalties

While WSIB is not compulsory for all employers in Ontario, there are certain businesses that are automatically covered by the WSIB:

1. Schedule 1 industries:

• mining and other mining-related industries
• manufacturing
• transportation and storage
• retail and wholesale trades
• construction

2. Schedule 2 industries:

• provincial government
• municipal governments
• railways
• telephone companies licensed by the federal government

3. “By Application” industries:

• financial institutions
• health care practitioner practices
• trade unions
• private day care
• travel agencies

Employers listed under the “by application” industries must apply at the WSIB before they can be covered.

Watch this video to find out more on filing a claim before the WSIB:

For more information on the WSIB, consult with a top long-term disability lawyer in Ontario as ranked by Lexpert.

Canada Pension Plan (CPP) Disability Benefits

Aside from the WSIB, another long-term disability benefit in Ontario is offered by the Canada Pension Plan (CPP). Employees in Ontario and other provinces (except for Québec, which runs its own Pension Pan) must contribute to the CPP to make them eligible for long-term disability benefits.

Employees or self-employed individuals in Ontario are eligible under the CPP disability benefits if they:

• are under 65 years old
• have made substantial contributions to the CPP

Read more about how to get benefits under BC's long-term disability laws here.

How do I apply for long-term disability benefits in Ontario?

First, employees will have to apply with any of the entities offering long-term disability benefits in Ontario. Insurance premiums will have to be paid according to the contract, which may be paid by the employee and/or the employer. Self-employed individuals will have to pay for themselves.

It is important that the terms and conditions of the insurance plan are clearly understood by the policyholder (the employee who bought a disability insurance plan). This is to prevent any dispute that may arise in the future, especially when filing for claim under the said insurance plan.

In particular, the policyholder must have a clear picture of the following:

• specific insurance premiums to be paid monthly
• illness or injury covered by the insurance plan
• maximum period that the benefits may be received
• if working is allowed while receiving disability benefits

When the employee then suffers from a disability, they will have to submit a claim with the insurance plan or program that they are enrolled in. Afterwards, the employee will be put in a “waiting period” while the insurance provider determines whether the employee is eligible for the disability benefits.

To find out about insurance disputes and how a lawyer can help, here’s everything you need to know about insurance dispute lawyers.

What medical conditions qualify for long-term disability benefits in Ontario?

In general, long-term disability benefits in Ontario will cover most medical conditions.

Private insurance plans will usually specify the medical conditions that they will cover in the contract.

WSIB will cover all kinds of injuries and sickness, but they must be work-related.

The CPP, on the other hand, will still cover the medical condition even if it’s not work-related.

How are long-term disability benefits in Ontario calculated?

Calculations for long-term disability benefits in Ontario will depend on the insurance policy or program that the employee is claiming under. The monthly pay may range from 60% to 80% of an employee’s gross monthly salary.

Government-run disability programs may differ:

• WSIB: 85% of an employee’s net earnings
• CPP: maximum monthly payment of C$1,538.67

Learn what to do if you don’t your long-term disability payments in this article.

Can you work while on long-term disability benefits in Ontario?

Working (either part-time or full-time) while receiving long-term disability benefits will depend on the insurance policy of the injured employee.

Private insurance policies may allow such arrangement under an any occupation  or own occupation insurance policy.

Working while on WSIB disability benefits

When there is a “material change in circumstances” such as working while still recovering from a work-related illness or injury, the WSIB disability benefits will be reduced. Injured employees will also have to inform the WSIB of such changes; otherwise, it may result in financial consequences and criminal offences.

Working while on CPP disability benefits

Disabled employees who wish work while receiving CPP disability benefits must first inform Service Canada. Benefits may be affected depending on the amount of income that they will be receiving from working or from becoming self-employed.

To know more about long-term disability benefits in Ontario or any other province, contact a Lexpert top-ranked long-term disability lawyer.