If you’re receiving long-term disability (LTD) benefits through a workplace or private insurance plan, your insurer may ask – or pressure – you to apply for Canada Pension Plan Disability (CPP Disability).
Why? What happens if you’re approved or denied? And how does CPP Disability impact your LTD payments?
At Samfiru Tumarkin LLP, we help thousands of Canadians navigate this exact issue. This FAQ breaks down how CPP Disability interacts with LTD insurance, what your insurer can and can’t do, and what steps you should take to protect your benefits.
💡 Looking for full details about how CPP Disability works, including how to apply or appeal a denial? Visit our Ultimate Guide to CPP Disability.
Table of Contents
2. Can My LTD Insurer Force Me to Apply?
3. Should I Apply for CPPD If I’m on LTD?
4. Can I Receive CPPD and LTD at the Same Time?
5. What If My LTD is Non-Taxable but CPPD Is Taxable?
6. What Happens to Retroactive CPPD Payments?
7. If CPPD Is Denied, Will My LTD Stop?
8. Do I Have to Appeal a CPPD Denial?
9. Does CPPD Stop If My LTD Ends or Settles?
10. Do I Have to Tell My Insurer If I’m Approved?
11. Need Help with Your LTD Claim?
What is CPP Disability?
CPP Disability is a federal government program that provides monthly financial support to Canadians under 65 who can’t work due to a severe and prolonged disability. It’s funded through contributions you make to the Canada Pension Plan (CPP) while employed.
It’s not a form of welfare or private insurance – it’s a public disability benefit for people who have paid into CPP through work.
Can My LTD Insurer Force Me to Apply for CPP Disability?
While your insurer can’t legally force you to apply for CPP Disability, most LTD insurance policies require it. If you refuse to apply, the insurer may take action to protect their financial interests.
Here’s what might happen if you don’t apply:
- Your insurer may estimate how much CPP Disability you could receive, and reduce your LTD payments by that amount anyway
- They may even cut off your LTD benefits entirely for failing to meet your contractual obligation
🧭 What You Should Do:
- Review your LTD policy for any clause requiring you to apply for CPP Disability
- If you’re unsure, contact us to review your policy at no cost
- Don’t ignore your insurer’s request without getting legal advice from Samfiru Tumarkin LLP
💡 Applying for CPP Disability doesn’t mean you’ll lose LTD – it could actually help strengthen your disability case (see next section).
Should I Apply for CPP Disability If I’m on LTD?
In most cases, yes – applying for CPP Disability can benefit you, even if your insurance company is the one suggesting it.
Here’s why it can work in your favour:
✅ Benefits of Applying for CPP Disability While on LTD
- It supports your LTD claim: Approval by the federal government confirms your disability, making it harder for your insurer to argue you’re capable of working.
- It protects your income long-term: If your LTD is cut off, CPP Disability gives you a second source of ongoing income.
- It may be required in your policy: Most LTD policies include a clause that says you must apply for CPP Disability if eligible.
🧭 What You Should Do:
- Apply for CPP Disability if your insurer asks – but make sure you understand the impact on your benefits first
- Speak to our team for free guidance before you apply or submit any documents
Can I Receive CPP Disability and LTD at the Same Time?
Yes, but your LTD insurer will usually reduce your monthly payment by the amount you receive from CPP Disability. This is called a CPP Disability offset, and it’s standard in most LTD policies.
💰 Example:
- You’re receiving $2,000/month in LTD benefits
- You’re approved for $1,000/month from CPP Disability
- Your insurer now pays only $1,000/month, while CPP Disability covers the other $1,000
- You still receive a total of $2,000/month – but from two sources
Your total monthly income stays the same, but the insurer pays less.
🧭 What You Should Do:
- Don’t be surprised by this reduction – it’s not a clawback, just an offset
- Keep your approval letter and share it with your insurer so they can adjust your file
- If you believe your insurer is deducting too much or made an error, contact us right away
What If My LTD is Non-Taxable but CPP Disability Is Taxable?
This is a common and frustrating issue. If your LTD payments are non-taxable, but your CPP Disability payments are taxable, you could end up with less money in your pocket – even though your total income appears unchanged.
🧾 Here’s How It Works:
- Your insurer reduces your LTD benefit by the full amount of CPP Disability
- But because CPP Disability is taxable, a portion of it goes to the government
- Result: you receive less net income than before CPP Disability was approved
🧭 What You Should Do:
- Ask your insurer to show you exactly where in your policy it allows them to deduct the full taxable CPP Disability amount
- If that wording doesn’t exist, they may not be entitled to it
- We can review your LTD policy and challenge any inappropriate deductions
What Happens to Retroactive CPP Disability Payments?
When you’re approved for CPP Disability, Service Canada may issue a lump sum retroactive payment to cover the months between when your disability began and when your claim was approved.
If that period overlaps with LTD benefits you already received, your insurance company will likely claim reimbursement for the amount they overpaid.
💰 Example:
- You’re approved for CPP Disability dating back 10 months
- CPP Disability sends you a $10,000 lump sum
- During that same time, your LTD insurer already paid you $20,000
- They may demand repayment of the $10,000 CPP Disability amount
🧭 What You Should Do:
- Don’t spend the retroactive payment until you know how much your insurer will ask for
- Ask for the insurer’s repayment breakdown in writing
- We can help verify whether their claim is accurate and allowed under your policy
If CPP Disability Is Denied, Will My LTD Stop?
No – your LTD benefits should not stop just because your CPP Disability application is denied.
CPP Disability and LTD are separate programs with different criteria. Many people who are approved for LTD are initially denied CPP Disability, especially if their medical evidence is incomplete or vague.
🔍 Why This Happens:
- CPP Disability has stricter definitions for “severe and prolonged” disabilities
- Service Canada may interpret your condition differently than your LTD insurer
- LTD policies are generally more flexible and less standardized
🧭 What You Should Do:
- Continue providing medical updates to your LTD insurer
- If your insurer threatens to cut off benefits due to a CPP Disability denial, this may be a violation of your rights
- Contact us immediately – we’ve helped thousands of clients fight back against wrongful LTD terminations
Do I Have to Appeal a CPP Disability Denial?
Not always. In most cases, you are not required to appeal a CPP Disability denial – unless your LTD policy specifically says you must.
Some insurers ask or encourage you to appeal, but they can’t force you unless it’s written into your contract.
📃 What to Look For:
- A clause in your LTD policy that says you’re obligated to pursue reconsideration or appeal of CPP Disability if denied
- If it’s not in writing, they can’t demand it
🧭 What You Should Do:
- Check your policy carefully for any appeal-related language
- If you’re unsure, send it to us – we’ll review it at no cost
- If appealing is optional, we’ll help you decide if it’s in your best interest
Do I Have to Appeal a CPP Disability Denial?
No. If your long-term disability (LTD) claim ends, is denied, or settles, your CPP Disability benefits will continue – as long as you still meet the eligibility criteria.
That’s because CPP Disability is a federal government program, and it’s completely separate from your private or group LTD insurance.
🛡️ Why This Matters:
- If your LTD claim ends, CPP Disability becomes your main financial support
- CPP Disability can also serve as proof that you’re still disabled – even after settling your LTD claim
- Some clients continue to receive CPP Disability for years after LTD ends
🧭 What You Should Do:
- Make sure Service Canada always has your up-to-date medical documentation
- If you settle your LTD claim, consider whether CPPD approval is still worth pursuing
- Speak to us before settling your LTD file—we can help structure the settlement to protect your CPPD
Do I Have to Tell My Insurer If I’m Approved for CPP Disability?
Yes. If you’re receiving long-term disability (LTD) benefits, you must inform your insurer if your CPP Disability claim is approved.
Most LTD policies require you to report any new sources of income that relate to your disability – including CPP Disability.
💸 Why Your Insurer Needs to Know:
- They’re likely entitled to a credit (offset) for the CPP Disability payments
- They may also be entitled to some or all of your retroactive lump sum
- If you don’t report it, your insurer may demand repayment lawyer – or suspend your benefits
🧭 What You Should Do:
- Notify your LTD insurer in writing once CPP Disability is approved
- Keep a copy of the approval letter and payment breakdown
- If your insurer is asking for more than they’re entitled to, we can review it for you
Need Help With Your LTD Claim?
Whether you’re being pressured to apply for CPP Disability, your insurer is reducing your payments unfairly, or your LTD benefits have been denied – we can help.
At Samfiru Tumarkin LLP, our disability lawyers helped tens of thousands of Canadians resolve disability benefit disputes. We know how to deal with insurance companies, and we’ll make sure you understand your rights every step of the way.
🧭 What You Can Do Today:
- Book a free consultation with our team – there’s no cost, no obligation
- Get a full review of your LTD policy and situation
- Let us deal with your insurer while you focus on your health
Call us at 1-855-821-5900 or contact us online to get started.
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