Is a severance pay out that is owed to LTD via a non-union policy contract, taken out lump sum to cover any payments they have made to me from the beginning or does it have to be used going forward while on LTD? What happens if I retire and want off of LTD? I would suppose they would take it and say goodbye?
Can a severance owed to LTD be given to them as a percentage of years you were on Ltd versus employment years when you were not on LTD? This probably does not matter.
Hi Jammer - My initial letter from them actually states severance on the list. I really think they can still request it if I try to retire before because it is in the contract and they would probably see it as overpayment from when they started paying me. I was hoping that maybe I could negotiate with them to close off with LTD early if they would allow me to keep my severance because if I decide to stay on LTD, they will have to pay me 70.000 plus over the next two years and with my illness I have no doubt that I will continue to meet the disability definition. You never know but I won’t hold my breath. I have resigned to the fact that it will transferred to them. With some debt and a need for an emergency fund that would have been so nice. Thanks for your thoughts!
I think some people get severance when there employment is terminated but LTD continues because that is a contract with the insurance company.
If severance is only deducted from the LTD going forward then retiring first would let you keep it.
I think think it would be interesting to hear what @David_Brannen thinks.
Regardless, I hope it all works out.
Maybe your health will stabilize.
There are different ways that severance can be handled. The most common is what I call the Overlapping-Months Method. This simply means that the severance would be designated as paid a certain amount over a certain amount of months. Then, if you got LTD in those months, then the LTD insurer MAY be entitled to an offset if such an offset is given to them in the Policy. This month by month method usually works out best for the worker / LTD recipient. Insurers often argue for just a gross set off where they claim the entire amount. it is important how the severance is structured and described as that will dictate what is possible in terms of offsets. This is all just general information and may not apply to your situation.
This is the kind fo thing where you would need very specific legal advice with a lawyer looking over your policy, collective agreement and terms of your severance.
Disability Lawyer with Resolute Legal
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