Can I Get Back Pay in a Long Term Disability Case?

Collecting Long Term Disability Withheld

Every long term disability policy through an employer has an elimination period or waiting period. An individual must satisfy the terms of the policy by meeting the definition of ‘disabled” from working during this waiting period. A person cannot receive long term disability back pay during the elimination period according to the terms of the policy. An elimination period of six months is common. During this time, you must be continuously unable to work during. You must provide medical information from your doctors supporting the claim for long term disability during and after the elimination period.

The last day of work before the waiting period is considered to be the date of disability.

The expectation during the waiting period is that the disabled worker will receive unemployment insurance benefits or short term disability benefits. Although the long term disability benefit is not paid until the end of the waiting period, some policies provide for payments to be backdated to the date of disability. If the disabled person has received other forms of compensation through unemployment insurance or short term disability, the payments may be offset by these other payments.

If a worker has been involved in a motor vehicle accident, he or she must apply for long term disability through the employer as a first payer. The auto insurer may take credit for amounts paid for long term disability and compel the disabled worker to make the application for long term disability. The auto insurer will pay income replacement benefits during the elimination period and may receive an offset depending on the wording of the policy.

Long Term Disability Back Pay

Many disabled workers experience financial hardship before they are entitled to collect long term disability withheld during the waiting period. Some employers will pay out accumulated sick time, vacation time and short term disability benefits during the elimination period. If there is no short term disability available through the employer, the disabled worker may apply for unemployment insurance benefits (“EI”) or other income replacement benefits (“IRBS”) through an auto insurer in the case of a motor vehicle accident. There are circumstances where benefits available through the employer or EI end before the elimination period has expired.

The definition of disabled from working also changes depending on the source and type of disability benefits. It is important to review the medical information provided by your doctors regarding the expected duration of disability since this may adversely affect a your entitlement to long term disability. Generally, a shorter duration of disability from working is an easier test to meet than a prolonged and serious inability to work.

Insurers contemplate that financial hardship will compel the disabled worker to return to work. Often, insurers will continue to deny long term disability benefits even after the elimination period has expired. It is important to make sure other sources of income available to disabled persons through the federal and provincial government during these often extended periods of time.

What to Do?

In cases of severe and prolonged disability, you are encouraged to apply for CPP disability benefits. Most policies allow the long term disability insurer to deduct CPP disability benefits. There is no waiting period required in applying for CPP disability benefits. You may also apply for Ontario Disability Support Payments (“ODSP”) which are based on financial need and disability through provincial funding. You may be required to re-pay ODSP once they receive long term disability back pay. For more answers, you can contact a qualified disability lawyer for more information.