Definitions of disabiity


#1

Are these definitions correct?
Is it possible to stay on LTD after 2 years if denied CPP-D?

Definition of disability

  • LTD before 2 years:

You will be considered totally disabled while you are continuously unable due to an illness to do the essential duties of your own occupation

  • LTD after 2 years:

you will be considered totally disabled if you are continuously unable due to an illness to do any occupation for which you are or may become reasonably qualified by education, training or experience.

  • CPP-D:

To qualify for a disability benefit under the Canada Pension Plan (CPP), a disability must be both “severe” and “prolonged”, and it must prevent you from being able to work at any job on a regular basis.
Severe means that you have a mental or physical disability that regularly stops you from doing any type of substantially gainful work.
Prolonged means that your disability is long-term and of indefinite duration or is likely to result in death.
employment is deemed “substantially gainful” if it allows the person to earn at least the maximum annual amount a person could receive as a CPP disability pension.


#2

CPP-D is the most stringent definition. It is possible to remain on LTD in your any occupation definition. With most LTD policies a Doctor would not be expected to clerk at 7-11. With CPP-D that Doctor would be expected to take any job, even a Wal-Mart greeter.


#3

A walmart greeter working 20 hours per week is about $13k which would be borderline substantially gainful.


#4

There is no direct relationship between being approved for CPP-D and LTD insurance payments, and vice versa. Generally speaking the “after two years” definition maps more closely to the CPP-D, but also they are quite different. The concept of “gainful employment” can be very different between CPP-D and LTD (depending on the Policy and amount of your pre-disability income). I have seen all possible scenarios of being approved for one and not the other.