LTD payment deductable of CPP disability benefit

In Mazzucco et. al. v Herer et. al, 2015 ONSC 7083 (CanLII), The Court the Ontario Superior Court of Justice recognized the long-standing principle that negligence damages are to be measured by actual loss and double recovery is prohibited. Yet, this principle has been subject to the “private insurance exception”. Courts have applied this exception in the context of LTD benefits. In particular, if these benefits were obtained under the terms of a collective agreement, they were held not to be deductible from a claim for lost wages.

Would this means that if you obtain your LTD payment through private collective agreement (which means a group insurance policy), and your CPP disability benefit got approved, the insurance company are not title to deduct you CPP disability payment from your LTD payment?


It depends what the group policy says.
There is typically a clause that say an insurer can deduct CPP-D from LTD.

CPP-D is not a claim for lost wages.

I’m not a lawyer and I don’t understand the question.

Is the LTD the result of a workplace accident?
I think there typically is a clause that says an insurer can deduct workplace safety payments from LTD.

I settled in a past claim that my medical treatments that were covered by my employee benefits by 90% should be compensated fully by the defendants as they should not benefit from my sacrificing wages -. That double recovery was allowed in these type of cases. It worked. So this is an interesting argument and one my lawyer made in 2010. I am not sure you could extend that to LTD–but interesting!

Negligence damages are measured by actual loss. Double recovery is not awarded, subject to limited exceptions.
One exception to the prohibition on double recovery is the “private insurance” exception. This exception provides that if a plaintiff has paid for the insurance benefits as part of his or her wage package, then the disability benefits should not be deducted from awards for income loss.
Other than in the circumstances described, an injured person is only to be compensated for actual loss and wages earned during a period of disability are generally deductible.

The laws and legal principles you are referring to live in the world of negligence law and don’t have any application to a disability claims under a group or individual policy, which are governed by contract law. The rules on what can /cannot be deducted are set out in each individual policy or group policy.

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Unless they pass a new law “CPP Disability exception” for LTD benefits :nerd_face:

I believe there were cases where LTD insureds argued that CPP-D benefits are within 65%-85% range of total benefits allowed by their LTD policy but they were denied even by the higher levels of court.

I know the rule of the Court the Canada Superior Court of Justice in 2005 (? or so) which declared LTD payment is deductible for CPP-D, depends on the insurance policy. One of the reason that support this rule is that deducting the CPP-D from LTD payment would reduced the premium and result in LTD insurance more affordable by more people. → this is ridiculous!
Why do we buy insurance? What is the meaning of insurance?
We buy insurance in order to amortize disaster of individual to a broad group of people, so that the disaster for the individual seems not that severe, or we buy insurance in order to amortize disaster of specific day(s) to a longer time of period, so that the disaster of specific day(s) seems not that severe.
But the Judge who make the rule that LTD payment is deductible for CPP-D worked totally against this principle. He made situation more severe for the individual to benefit the broader group of people who are not suffering from disaster, or make the days when people in disasters more serious in order to benefit the common days when there’s no disaster. What a “brain-misfunction” Judge ! Good job! The people in desperate will "thank " you !
What is more, the insurance company have many way to lower the premium in order to make the LTD insurance affordable to more people. They don’t sell the LTD insurance solely, it’s usually included in a broader group insurance package. The actuaries have many way to keep a good balance of affordable premium to more people and business profit of insurance company. Deduct the CPP-D from LTD payment is the most un-humane way ! It only reflect the greediness of the insurance company and stupid of the Judge who make this rule.
Deducting CPP-D is just subsidize the BIG company with government’s money, which intend to help the people who need the money most!
Thank you guys for allowing my to vent here.

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The parliament can pass M-103 motion quickly, and the Judge can rule to compensate Kdar for 1050 Million, but no one will propose passing a new law “CPP Disability exception” for LTD benefits, and the Judge insist LTD is deductible for CPP-D.
What can you do?

Jaqueg, you seem to be quite concerned about LTD and CPP-D. So what’s your story? Currently on LTD?

Yes, Elaine.
I am currently on LTD, and you know, people are in desperate situation when they are really disable. You can’t work, you can’t socialize, can’t drive … especially the financial pressure you face with soaring price (food, house, utility …) with limited financial source. The CPP-D is some sort of light shed on you when you are in a dark room, well, guess what, the insurance company will take it all, and the Judge said that’s what the contract say the insurance company are entitle to do so! well, you drop into darkness again.
If you look carefully into it, this practice is not Canadian style at all. We are kind to refugee because they need help, we are kind to all minority groups because they are weak, but why the insurance company and the Judge are so cold-blood to Canadians who are really weak and indeed need help???

Here on the forum we try to share our experiences with others who find themselves in similar situations. Stay positive and try to find peace within yourself. Help others. It’ll make you happier. Wish you well!

Apparently there is a lot of fraud going on by people claiming a disability when they don’t have one.

That is a very untrue statement! The Insurance Companies spend a lot of money on media to give out that impression!
It is a bought and paid for untrue stigmatization of people with disabilities.

Max fraud is maybe 10%—or less. It’s the Insurers who commit more fraud than any amount of folks

I can’t agree with you.
There could be some fraud in claiming LTD, but punish the whole group of LTD people for this seemingly “fraud claiming” is truly unfair.

Hey Jammer-just because I disagree with the statement, I really appreciate all of your other comments and questions! You are a great asset and very helpful! :slightly_smiling_face:


It is too bad we’ll never know the real number.

If my CPP-D (approximately) was not deducted from my LTD then my income would be 85% of my working incoming.
Just my LTD is 60%.
85% seems unreasonable high and I think would lead to more fraud.
60% is really low so who would choose not to work if they would get that.
I don’t know what a reasonable % ($ amount) would be before fraud becomes likely.
I know federal government employees get 70% of their work income.

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FYI-I am not pulling the 10% out of the air! That number is from the Insurance Bureau of Canada, Coalition Against Insurance Fraud and such. It is the Insurer’s themselves who place the fraud at about 10%. Given the source I personally think that number is an exaggeration.

It is very hurtful to those with more subjective conditions to perpetuate a view that disability fraud is rampant.

look up unconscious bias

I can’t agree with you again.
This is exactly what I meant punish the whole group of LTD people for this seemingly “fraud claiming” , and deter the fraud claim by making the really LTD people more miserable.
Well, then, the solution of traffic jam will bot be building a broader road, instead, we punish the drivers, so that the solution for traffic jam will be be making the road full of pot hole so that no one would drive on that road, Bang! no traffic jam any more!