So here’s my question. Most Ltd will not allow any $ to be earned without paying it back dollar for dollar, but this NEW beneifit is NOT CONSIDERED EARNED money and the beneifit is not listed in their policies as it is brand new. How legal or likely will it be for the Ltd insurance companies to take it back from their clients in times of need? Personally I dont think it should need to be reported as it is NOT considered Income. Thoughts or answers anyone??
No answer, but it is an income replacement benefit. If they found out and you do not report, you may be subject to having to pay it back or having your LTD stopped for breach of contract. Not sure how your Insurer would know if you did receive.
It would really depend on the specific offset clauses in your LTD policy. Some clauses are worded broadly and cover much more than earned income.
The bigger concern people should have is the government asking for the money back, rather than the insurance company. Most people who are receiving CPP or LTD do not qualify for the CERB even if they are being approved and paid at the moment.
I have a blog article coming out next week on this because it is going to be a big problem for some people.
Disability Lawyer with Resolute Legal
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You can be very sure that it is an offset.
E.I. is an offset, this will be treated similarly. Taxable income benefit, or a similar definition.
Most LTDs do not say earned income, they can word it differently.
I think mine says “any government program”.
I don’t qualify because I don’t work.
You’re going to have to check the language of your LTD benefits. It would not be clawed back under my LTD policy.
This is correct. Unless there is language like “any government program” then likely it would not be an offset. Insurance companies have to be very specific and clear with any offset wording.
The conern I have is that even if the LTD won’t offset, their is a risk that many people are mistakingly thinking they qualify, when if fact they don’t. So Revenue Canada will see refund of CERB from people during next tax season.