Impact of termination of employment on LTD Payments

Disability Insurance
1

Will the LTD be discontinued if the employer terminates you due to “frustration”?

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2

No. A termination by the employer for frustration will not affect your LTD payments in any way. Your LTD is only tied to your employment in the sense that your claim must have started while you were “actively employed”. Once the claim is approved, you can be terminated form employment or resign and it has no impact on your right to long-term disability benefits.

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3

David how will severance pay affect LTD or CPPD payments?

4

For an insurer to be able to offset severance, the policies master contract needs to state that severance payments are offsetable (or something similar). If the LTD contract silent on severance then they can not modify your LTD payments.

5

It depends on the wording of the individual LTD policy. The wording can vary quite a bit, and sometimes won’t even allow offset of severance. The other factor is HOW the severance is structured as there are certain types of severance that are not deductible under most LTD plans. For example, money paid to compensation for human rights damages for injury to dignity and self respect.

David Brannen

Disability Lawyer with Resolute Legal

The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-917-7050 to speak with a member with our disability claim support team.