Effects of closing off insurance and collecting severance

I don’t know if this would help but if you have debt, solely in your name, a consumer proposal may be worth looking at.
https://www.bankruptcy-canada.ca/ is a good resource and has a forum. My husband filed a proposal two years ago and he owed 102,000 and he settled for 27,000. We were able to keep all assets.

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Thanks for the advice

Rupert - I’m new on here and was reading your blog. I’m wondering if you would share what has happened over the summer? I’m now in a very similar situation as you. I received LTD payments for 2 1/2 years before the Insurer cut me off. My Employer then put me on an “unpaid leave of absence” and I was allowed to pay for my own benefits - up to the 1 year mark that the Insurer cut off my payments… It’s been almost a year now of only having CPP-D payments and I’m suing the Insurer. However - I just turned 55 and I am wondering what’s going to happen in a few weeks when the year is up (no LTD payments). Will the Employer terminate/retire me? Will I get a Severance? What happens to the Litigation process? Personally I don’t see how the Insurer has any right to my Severance - how would they even know if I received one? That’s Private & Confidential and I would think that Privacy Laws come into play here if the Employer disclosed it to the Insurer. Can I still continue to sue the Insurer for cutting off my benefits; causing financial hardship (we’re considering a Consumer Proposal now), etc. etc. I hope things worked out well for you.

Hi Carmel
As David expressed to me these situations can be quite complicated and are dependent on your specific policy. Even though my policy states that if my employers terminates me and I am still on LTD, the insurance co. is entitled to offset their payments by taking my vacation payout and if I get severance.
David expressed that in some cases even though the policy states that LTD can collect your severance, a part of the severance can sometimes be paid to the client with legal help. It depends. I would advise you to seek out a consult with a disability lawyer if possible - usually initial 30 minute consults are free. Sounds like you may be doing that.

I am still being approved for LTD and supported by my employer and have been approved for CPP-D, so I am not making any moves at this point. LTD will be reduced as I will be getting my income from 2 sources now. (LTD & CPP-D) If LTD continues to approve me and I remain sick, I will stay on LTD until age 65 (when coverage ends), even if my employers decide to terminate me, LTD will still provide coverage given I meet their definition of disability (can’t work at any job) I have also applied for the Disability Tax Credit (my Doc is supporting this) and if approved my insurance does not touch this and you may receive back payments even if you were sick and still working - depends on date of diagnosis.

So I am still waiting to hear the outcome from LTD re: 2 year mark and change in definition of disability. I am older than you so LTD would not have many years to pay out the insurance (will be 62 next spring) so that may work in my favour along with being approved for CPP-D.

Questions for you:
What were their reasons for cutting you off? Do you have the support of your physicians? Sounds like your employer is still supporting you and keeping a position open for you for now. My HR person told me the whole process as far as my employer was concerned. I know I will be receiving a letter from my employer in about 3 months after the 2 year mark asking me if I think I will be able to return to work and if I say I hope to return but still off in 4-6 months will receive another letter re: termination due to health issues. I am also non-union so that makes a big difference in how things are handled. My employer is also making some big changes in the area I work so that could impact how things go as well.
Re: severance: My understanding is that if you are receiving any income (again dependent on what is outlined in your specific policy) while on LTD, the insurance company is allowed to take these assets to offset what they have paid you.

Good luck with your legal endeavours. Keep me posted. Hoping that things go well for you! Very scary when you are sick and trying to live off a significantly reduced income. Consumer proposals can be very helpful if you have significant debt to pay off as well. Often 2 thirds of what you owe are forgiven - also depends on situation and if you own a house - worth seeking advice on.

Take Care,

Rupert

Yes, I believe there has been arguments over severance and statutory pay. My husband’s policy includes severance as part of the offset. However if it is statutory pay that is required to be paid out under Federal/Provincial laws you may be able to protest that. Also if it is damages for wrongful dismissal another argument could be made.

The legal process is often a long journey! Hang in there. Insurance companies always deny and delay–sometimes though near the end of the year they just settle to clear it off the desk.

You know Rupert, depending on the type of employment, 2 years and 6 months maybe unreasonable to be terminated so early. Hopefully they pay severance or statutory notice pay.

The Insurance company stated that while there is no dispute of my illnesses; there’s no proof that I cannot physically still work.

Yes, I have full support of my Specialist and my Family Doctor. They were livid when I was cut-off and each wrote a scathing letter to the Insurance Company for their actions. Plus my Family Doctor spoke to the Case Manager for 2 hours trying to get them to reverse the decision but she said the Case Worker was extremely difficult and their mind was made up no matter what she said.

My Employer moved me from LTD to “Unpaid Leave of Absence” - therefore I’m not considered as being on Disability. My Employer has not kept in contact with me for the entire time I’ve been on LTD. The only time they contacted me was several months after the Insurer cut me off LTD - and they were forced to deal with the situation rather than terminate me immediately, I had worked there for 32 years prior to going on Disability. I am also Non-Union.

That’s the thing - I’m NOT receiving any income and now not considered to be on LTD due to the lawsuit against the Insurer. I have not received any Disability Benefits from the Insurer for a year - therefore I think that if I were terminated I would hope that if it included Severance the Insurer couldn’t touch it - unless they reduce a settlement by the amount of any Severance payment. Definitely questions for my Disability Lawyer. Thanks for your well wishes. I also wish you well. And yes it’s very scary at the moment. We just may end up in a Consumer Proposal which is what I’m trying to avoid - but it just might be inevitable.

Hi Caramel
A consumer proposal is similar but less risk than going bankrupt in many ways.
You will have to build up your credit score again no matter what choice you make. If you go for the proposal you will have to pay a portion of your debt to the creditors (often a 1/3) but with bankruptcy you can risk the creditors taking your assets - not the case with a proposal. Once a proposal is approved, you are legally protected. With bankruptcy you may end up with numerous calls from your creditors. A proposal is set up between you and your certified trustee who acts on your behalf with the creditors. Going to see a trustee that looks after these areas is really important to discuss your particular situation. They are not shaming! Everyones financial situation is different so you need to discuss details around who you owe money to, bank balances, credit cards, loans etc You also need to make up a reasonable budget. Reason for getting into debt - health.
They will ask you if you have dependents, own a house etc. If you google Hoyes which is a reputable firm dealing with these issues they have good info on their website. Hope this is helpful.
Good luck

I don’t know about this frustrated employer topic. Can you explain. I work for a provincial government and we get a retirement allowance (1 week for every year of service but if leaving for sick reasons 2 weeks/for every year of service). I have to let them know by April 2018 if I can return to work (not my position that was already filled) but any position I am qualified for and can do. If I say no I cannot go back then my contract is ended. Does that mean I frustrated the employer and will lose my severance? If I can go back I have an additional 18 months to find a suitable position and remain on medical benefits and such but I think then if I could not go back my severance would turn to regular retirement pay.

At least in Ontario, not sure if it is all provinces.
An employer can terminate an employee if the employer believes the employee will never return to work.
The employment contract is “frustrated”.

If it was a private company then my guess would be you don’t get severance.
It might be in your employment contract that you would get severance.
It could also be the insurance company tries to take it.
I would ask your HR or union rep.
My friend who works for the feds got a lot of support from his union rep.

Thank you. I best check into this. Another thing I read in these posts that was discouraging was that if you get CPPD, when you get your work pension you don’t get your bridge…CPPD told me that my regular CPP would not be reduced from now till 65 so I just figured, incorrectly I might add,that since it wasn’t regular CPP that my bridge would still be mine. I guess I need to recalculate what my income is going to be when it comes time to draw from my work pension.

Some people think you get severance.
I have no idea so best to talk to your union or HR.
I also read about not getting your bridge.
You need to ask someone in HR or your union.

Thank you, Jammer, I will call the HR office and find out.

My employer said I will still get my bridge while collecting CPPD so that was encouraging.

I don’t know how to start a new discussion so will add to this topic.

My LTD insurer asked for a mediation instead of the scheduled discovery. When we got there they gave a low ball offer of the decided value of my claim. Approximately 6%. I was ready to compromise but there was none at all on their part. The negotiations failed once the mediator got both bottom offers. He said we were too far apart to ever agree. We had only negotiated for 2.25 hours perhaps. With only 2 offers going back and forth. I felt the mediation was really rushed. I don’t understand why the insurance company wanted to go to mediation if they weren’t prepared to compromise. Was it just a cheap discovery for them? We now have to book a discovery and a court date so could be another 2 years before trial. I am confused. Would have liked to have the whole thing behind me. I don’t want to go to trial but I am prepared to go. One reason given for their low ball offer was that I just went to WCB Tribunal and they feel I will win (only 9% of tribunal cases are overturned). This does not make sense because they had a condition on their offer that would have them be paid back if I was awarded WCB. Are they just trying to waste my time and money as I have to pay half of the mediation?

I added you post to a new topic! This is a great topic to review with others! Pros and Cons of Mediation?

If I was getting $3000 per month on Ltd and also collecting CPD .and offered 10 months of severance from my employer how do Ltd calculate? Is it based on the 10 months of severance so therefore no LTD for 10 months or do Ltd look at the gross amount and deduct more months?

Thank you