All Source Maximum: What It Means for Disability Benefits in Canada

If you’re receiving disability benefits in Canada, you may have heard the term all source maximum. This phrase shows up in many long-term disability (LTD) policies and can directly affect how much money you receive each month. Understanding it is key to protecting your income.

Below is a simple and clear guide to what the term means, how it works, and how insurance companies use it.

What Is the All Source Maximum? (Simple Definition)

The all source maximum is a rule in many disability insurance policies that limits the total amount of income you can receive from all sources combined while on disability.

This includes:

• Long-term disability (LTD) payments
• Short-term disability (STD) payments
• CPP Disability (CPP-D)
• Workers’ compensation
• Employment Insurance (EI) benefits
• Any income you earn while disabled
• Other government or private benefits

Why Do Insurance Companies Use an All Source Maximum?

Insurance companies use it to avoid paying you more than you earned before becoming disabled. They use it to:

• Prevent “overpayment” when you receive multiple benefits
• Reduce what they pay if your total income exceeds the policy limit
• Control their financial exposure across multiple claims

How It Works (Example)

Let’s say you earned $5,000 per month before your disability.

Your policy says your all source maximum is 85% of your pre-disability income, which is:

$5,000 × 85% = $4,250

Now imagine you receive:

• $3,000 from LTD
• $1,500 from CPP Disability

Total = $4,500, which is higher than your maximum of $4,250.

In this situation, the insurance company will reduce your LTD payments so your total income drops back down to $4,250.

Why the All Source Maximum Matters for You

Understanding this rule can help you:

• Avoid unexpected LTD payment reductions
• Understand why your insurer is demanding repayment
• Plan your finances while you’re off work
• Know what benefits you’re allowed to receive together

Insurance companies often rely on the all source maximum to justify cutting LTD benefits — even when their math is wrong. It’s one of the most common sources of disputes.

Does the All Source Maximum Mean You’re Not Allowed Multiple Benefits?

No.
You can receive multiple benefits at the same time — such as LTD, CPP-D, and EI sickness — as long as the total stays under the limit in your policy.

If your insurer says you’ve exceeded the all source maximum, you should ask for:

• A detailed breakdown of their calculations
• A copy of the policy section they’re relying on
• Proof of every number they used

Errors are common.

What Should You Do if Your Insurer Reduces Your LTD Because of the All Source Maximum?

If your LTD payments suddenly drop or you’re told you owe money due to the all source maximum, speak with a disability lawyer immediately.

A lawyer can:

• Review your policy
• Check whether the insurer’s math is correct
• Challenge unfair deductions
• Ensure your benefits continue
• Fight back if the insurer cuts off your LTD entirely

When to Call a Disability Lawyer

If your LTD insurer:

• Says you exceeded the all source maximum
• Reduces or stops your benefit
• Demands repayment
• Pressures you to apply for CPP Disability
• Calculates your income incorrectly

…you should get legal advice right away.

Samfiru Tumarkin LLP helps thousands of Canadians across the country challenge LTD denials, reductions, and unfair calculations.

FAQ About the All Source Maximum

Is the all source maximum legal?

Yes, if it is clearly written in your insurance policy. But insurers often misapply it.

What is a typical limit?

Most LTD policies use 85% or 100% of pre-disability income.

Can the all source maximum reduce my LTD to zero?

In rare cases — yes. If your other income exceeds the maximum, LTD can be cut to zero.

Does CPP-D automatically reduce LTD?

Yes. Most insurers deduct CPP Disability because it counts toward the all source maximum.

Speak to a Disability Lawyer About Your All Source Maximum Issue

If your insurer is reducing your payments because of the all source maximum, or claiming that you’ve been “overpaid,” you don’t have to accept their decision. These calculations are often wrong — and they can have a major impact on your income while you’re unable to work.

Samfiru Tumarkin LLP is Canada’s most experienced disability law firm.
We’ve helped tens of thousands of people across the country get the short and long-term disability benefits they’re owed, no matter how aggressive the insurance company becomes.

Our disability lawyers in Canada will:

• Review your LTD policy and its clauses
• Check whether your insurer’s math is correct
• Push back against unfair deductions or repayment demands
• Get your LTD benefits back on track — quickly and confidentially

You don’t pay us until we win your case.