I am on LTD since 2020. Was a registered nurse. They went back to 2023. A lump sum was sent to Medavie for 63 000$. Is that whole amount going to be taxed. I now have less income since approved so how do you pay back when you are struggling and poor. There s unfairness. Am I being punished for being unwell How will this survive. Is this crazy making. And why is a benefit being taxed that I payed into since I started working. I have 30 years I had worked as a nurse. I can t even get my vacation hours money I had when stopped work 6 years ago. I feel so victimized
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Yes it’s brutal. I consoled myself with knowing at least the sick years will drop out from my eventual CPP calculations. You can go back and claim the CPPD across different tax years if it works out better and apply for the Disability Tax Credit.
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Unfortunately, the LTD contracts were written by the insurance companies to benefit them, not the disabled workers. They don’t care that you owe taxes. It’s just about them making money. 
I understand all of our financial situations are different and I try to empathize for those hit hard with the taxes on the cppd lump sum.
The way I viewed this was I was so concerned about being rejected from CPP disability that when I was accepted I looked at the taxes as a small sum to pay for a very lengthy CPP disability payout over many years. So yes there was initial pain but I tried to frame it as guaranteed income replacement until 65
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The biggest pain point is the recharacterization of previous payments from non-taxable to taxable creating a backpayment liability on taxes. We paid extra for the LTD insurance so the payments are non-taxable after disability, then after the money is long spent the sickest among us get told we have to pay the government part of what is already spent. If definitely feels unfair to lose part of the non-taxable feature that we paid extra for.
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