Long-term disability (LTD) benefits provide income if an illness, injury or medical condition prevents you from working for an extended period.
In Canada, LTD coverage commonly comes through an employer benefits plan, association plan or private disability insurance policy. If you qualify, the insurance company pays a percentage of your income while you remain unable to work under the terms of your policy.
You do not need to be permanently disabled or completely incapable of everyday activities to qualify. The key question is whether your medical condition prevents you from performing the work required under your LTD policy.
On This Page:
- 1. What Is Long-Term Disability?
- 2. How Does Long-Term Disability Work in Canada?
- 3. What Qualifies for LTD?
- 4. How Much Does Long-Term Disability Pay?
- 5. How Long Can You Receive LTD Benefits?
- 6. Own Occupation vs. Any Occupation
- 7. What Happens After Two Years on LTD?
- 8. How to Apply for Long-Term Disability
- 9. What if Your LTD Claim Is Denied or Cut Off?
- 10. Returning to Work While on LTD
- 11. LTD and Your Employment
- 12. Long-Term Disability by Province
- 13. Frequently Asked Questions
What Is Long-Term Disability?
Long-term disability is insurance that replaces part of your income when a medical condition prevents you from working for an extended period.
Coverage can come from:
- An employer group benefits plan
- A union or professional association plan
- An individual disability insurance policy
- A private insurance policy purchased directly from an insurer
Your LTD policy determines when benefits begin, how much you receive, what you must prove and how long benefits can continue.
Long-term disability is different from short-term disability, which is generally designed for shorter absences from work.
How Does Long-Term Disability Work in Canada?
Every LTD policy is different, but most claims follow a similar process.
1. A medical condition prevents you from working
You become unable to perform your job because of an illness, injury or other medical condition.
2. You complete the waiting period
LTD benefits do not normally begin immediately.
Your policy will contain a waiting period, also called an elimination or qualifying period. Many policies require you to remain disabled for several months before LTD payments can begin.
During this time, you could receive short-term disability benefits, sick pay, EI sickness benefits or another form of income support.
3. You apply for LTD benefits
You generally need to provide information from:
- You
- Your doctor or treatment provider
- Your employer, if the coverage is through work
The insurer reviews the medical evidence, your job duties and the wording of your policy before deciding whether to approve the claim.
Read our complete guide on how to apply for long-term disability in Canada.
4. The insurer continues reviewing your claim
Approval does not mean your LTD benefits are guaranteed indefinitely.
The insurance company can continue asking for medical updates and information about your treatment, recovery and ability to work.
What Medical Conditions Qualify for Long-Term Disability?
There is no single list of conditions that automatically qualify for LTD benefits.
What matters is how your condition affects your ability to work.
Physical and mental health conditions can both qualify, including:
- Depression and anxiety
- PTSD
- Bipolar disorder
- Chronic pain
- Fibromyalgia
- Chronic fatigue syndrome
- Long COVID
- Cancer
- Multiple sclerosis
- Neurological conditions
- Heart conditions
- Autoimmune diseases
- Back, neck and joint conditions
- Migraines
- Post-concussion syndrome
- Serious side effects from medication
You can also qualify for LTD with a condition that is difficult to measure through an X-ray, MRI, blood test or other objective test.
A diagnosis alone, however, is usually not enough. Your medical evidence should explain your symptoms, restrictions and limitations and why they prevent you from working reliably.
Read more about what medical conditions qualify for disability in Canada.
What Does “Totally Disabled” Mean?
The term totally disabled can sound more extreme than it actually is.
It does not necessarily mean that you are bedridden, helpless or incapable of doing anything.
You could still be able to:
- Drive
- Attend medical appointments
- Take care of yourself
- Complete some household tasks
- Use a computer
- Exercise within your medical restrictions
- Have good days and bad days
and still qualify for LTD.
The important question is whether you can perform the work required under your policy safely, consistently and on a sustained basis.
Being able to complete an activity for 20 minutes is very different from being able to maintain regular attendance, concentration and productivity throughout a normal workweek.
How Much Does Long-Term Disability Pay in Canada?
The amount depends on your insurance policy.
Many workplace LTD policies replace approximately 60 to 70 per cent of your pre-disability income, but your coverage can be higher or lower.
Your policy can also contain:
- A maximum monthly benefit
- Different percentages for different portions of your income
- Reductions for other disability income
- Rules about employment earnings
- CPP Disability offsets
Check the actual LTD policy rather than assuming that your benefit will equal your salary or your short-term disability payment.
How Long Can You Be on Long-Term Disability?
LTD can potentially last for years.
How long benefits continue depends on:
- Your medical condition
- Whether you continue to meet the policy’s definition of disability
- Your ability to return to work
- The maximum benefit period in your policy
- Any exclusions or limitations that apply
Some policies can provide benefits until a specified age (typically 65) if you remain disabled, while others have shorter maximum benefit periods.
One of the most important points in many LTD claims occurs around the two-year mark, when the definition of disability can change.
Own Occupation vs. Any Occupation
Many LTD policies use two different tests to determine whether you are disabled.
Own occupation
During the initial stage of a claim, the insurer often considers whether your medical condition prevents you from performing your own occupation.
You do not necessarily need to prove that you are incapable of all work.
For example, someone who can no longer perform a physically demanding job could still qualify even if they are capable of performing some lighter activities.
Learn more about own occupation disability insurance.
Any occupation
Later, many policies change to an any occupation definition.
The insurer can then consider whether you are capable of performing another suitable occupation based on factors such as your:
- Education
- Training
- Work experience
- Transferable skills
- Medical restrictions
- Ability to work reliably
- Potential earnings, depending on the policy
“Any occupation” does not necessarily mean literally any job.
Read our guides to any occupation disability and own occupation vs. any occupation.
What Happens After Two Years on Long-Term Disability?
The two-year point is a major milestone in many LTD claims.
A common policy structure provides benefits when you can’t perform your own occupation during the first part of the claim and later asks whether you can perform another suitable occupation.
This is sometimes called the change of definition.
Your benefits do not automatically end after two years.
If your medical condition continues to prevent you from performing suitable work under the new definition, you can continue to qualify for LTD.
However, insurers can review claims closely as this point approaches and can decide to terminate benefits even when your medical condition has not improved.
How Do You Apply for Long-Term Disability?
Start early.
If it appears that your medical condition will keep you off work long enough to need LTD benefits, find out:
- Whether you have LTD coverage
- When the waiting period ends
- When your application is due
- What definition of disability applies
- What forms must be completed
- What medical evidence is required
Do not assume that short-term disability automatically turns into long-term disability.
You will generally need to submit an LTD application and updated medical information.
See our step-by-step guide on how to apply for long-term disability benefits.
What if Your Long-Term Disability Claim Is Denied?
An LTD denial does not necessarily mean that you aren’t entitled to benefits.
Insurance companies can deny claims for reasons including:
- Not enough medical evidence
- Disagreement about your ability to work
- An insurer medical assessment
- A pre-existing condition exclusion
- Missed deadlines
- A change from own occupation to any occupation
- Surveillance or social media evidence
- A dispute about whether you are receiving appropriate treatment
If your claim is denied, read the denial letter carefully and get legal advice before deciding what to do next.
There are also strict deadlines for taking legal action against an insurance company. Do not allow an appeal process to cause you to miss an important limitation period.
Learn more about what to do when your long-term disability claim is denied and how a long-term disability appeal works in Canada.
Can Long-Term Disability Benefits Be Cut Off?
Yes. An insurer can decide that you no longer meet the definition of disability and terminate your payments.
This can happen when the insurer claims:
- Your medical condition has improved
- Your medical information no longer supports disability
- You can return to your own occupation
- You can perform another suitable occupation
- You have not participated in treatment or rehabilitation
- Your activities are inconsistent with your stated restrictions
- A policy limitation or exclusion applies
A termination letter is the insurer’s decision — not necessarily the final word on your entitlement to benefits.
If your LTD benefits have been cut off while you remain unable to work, speak with a disability lawyer.
Can You Return to Work While on LTD?
Yes. Many people eventually return to work gradually after receiving long-term disability benefits.
A return should be based on your actual medical capacity, not simply the insurer’s preferred return date.
Depending on your condition, a gradual return could include:
- Reduced hours
- Fewer days per week
- Modified duties
- Additional breaks
- Temporary restrictions
- Workplace accommodation
Your LTD policy can also contain rehabilitation, partial disability or return-to-work provisions that affect your benefits while you earn employment income.
If you are considering a return, read our guide to returning to work after long-term disability.
Can You Work While Receiving LTD Benefits?
Sometimes.
Working does not automatically mean that you are no longer disabled.
Depending on your policy and medical restrictions, you could potentially:
- Work part-time
- Attempt a gradual return
- Perform modified duties
- Work in a different occupation
- Participate in a medically supported work trial
However, your earnings and work activity can affect your LTD payments and the insurer’s assessment of your claim.
Always review the policy and disclose work activity as required.
Read our full guide on working while receiving long-term disability benefits in Canada.
Can You Be Fired While on Long-Term Disability?
Being on LTD does not give you absolute protection from termination.
However, an employer can’t simply discriminate against you because you have a disability. Employment and human rights laws can require employers to accommodate employees with disabilities to the point of undue hardship.
Your employment rights vary depending on your province and whether your workplace is provincially or federally regulated.
If your employer terminates you while you are on LTD, do not sign a severance package or release before getting legal advice. The termination can affect both your employment rights and your disability benefits.
Learn more about whether you are still employed while on long-term disability and how a severance package can affect LTD benefits.
Long-Term Disability Benefits by Province
Long-term disability insurance operates across Canada, but employment, insurance and human rights laws can vary by province.
Read our provincial LTD guides for more information about your rights where you live:
- Long-Term Disability in Ontario
- Long-Term Disability in British Columbia
- Long-Term Disability in Alberta
- Long-Term Disability in Manitoba
- Long-Term Disability in Saskatchewan
- Long-Term Disability in Nova Scotia
- Long-Term Disability in New Brunswick
- Long-Term Disability in Prince Edward Island
- Long-Term Disability in Newfoundland and Labrador
Frequently Asked Questions About Long-Term Disability in Canada
Is long-term disability a government benefit?
Usually not. LTD is generally provided through a workplace benefits plan or private disability insurance policy.
Government programs such as CPP Disability are separate and have different eligibility rules.
Are long-term disability benefits taxable?
It depends largely on how the insurance premiums were paid.
If you paid the full cost of the LTD premiums yourself, the benefits are generally received tax-free. If your employer paid all or part of the premiums, the benefits are generally taxable.
Check how your specific plan was funded and get tax advice where necessary.
Can you receive CPP Disability and LTD at the same time?
Yes, but many LTD policies allow the insurance company to reduce your LTD payment by the amount you receive from CPP Disability.
Your policy determines how these benefits interact.
Read more about CPP Disability and long-term disability benefits.
Can you get LTD for a mental health condition?
Yes. Depression, anxiety, PTSD and other mental health conditions can qualify for LTD benefits when they prevent you from working.
There is no requirement that a disability be physically visible.
Does long-term disability automatically end after two years?
No.
Many policies change their definition of disability around the two-year mark, but benefits can continue if you meet the new definition.
Do you have to be permanently disabled to qualify for LTD?
No.
You can qualify for long-term disability without being permanently disabled. You need to satisfy the definition of disability in your insurance policy during the period you are claiming benefits.
Can a pre-existing medical condition prevent you from getting LTD?
It can, but having a previous medical condition does not automatically disqualify you.
The insurer must rely on the actual pre-existing condition wording in your policy and apply it to the circumstances of your claim.
Learn more about pre-existing conditions and long-term disability.
Get Help With a Long-Term Disability Claim
You paid for disability insurance so that income would be there when a medical condition prevents you from working.
If your long-term disability claim has been denied, delayed or cut off, you do not have to accept the insurance company’s decision.
Samfiru Tumarkin LLP’s long-term disability lawyers represent people with disability claims across Canada, excluding Quebec.
Contact us to find out what your rights are and how we can recover the benefits you are owed.