When you become disabled, there is an immediate reduction in your income. All long term disability insurance involves a monthly payment which is replaces only a portion of your pre-disability income. An obvious question is whether you can earn income from casual or part-time work to supplement your disability income.

Understanding Disability Insurance Policies

Long term disability coverage takes different forms:

1. many people are covered by a group long term disability policy through their employer;
2. self employed individuals and people without access to group insurance coverage will purchase private disability income coverage;
3. creditor or mortgage disability coverage which will pay the interest, minimum payment or the monthly payment on a line of credit or mortgage for a period of up to 24 months during a period of total disability; or
4. waiver of premium (the cost of insurance) for life insurance or other insurance while disabled.

Can You Work While on Disability in Ontario?

If your disability claim has been accepted by your insurer, you may wonder if you can earn extra income while receiving disability benefits. The answer depends on the terms of the disability policy, the amount of income you are receiving and the type of work you are performing.

A. Group LTD Insurance:

If you are receiving group LTD benefits, whether you can work is determined by your disability policy language. Some policies will say that you will not receive benefits if you work in any occupation and earn money. While some group policies will have this provision, there are times where you may be able to work part-time and continue to receive benefits. It is important to ensure that you are upfront with the case manager and that you disclose any wages earned as well as your hours worked. You can advise the insurer that you would like to participate in some minimal part time occasional work in order to provide some much needed extra income to support yourself. It certainly seems reasonable for an insurer to allow you to work part-time as a rehabilitation incentive. After all, if you are able to work and eventually are able to earn wages close to your pre-disability earnings, it is likely that you will return to employment and no longer qualify for benefits.

B. Private Disability Income Policies:

Private disability contracts often provide a variety of disability benefits such as:

1. total disability benefits – this benefit is payable if you cannot perform the essential duties of your own occupation;
2. partial disability benefits – if you are still working in your own occupation but you are unable to perform one or more of the essential duties of your own occupation, the policy will pay a partial disability payment;
3. residual disability benefits – if you suffer from a reduction in your pre-disability income which exceeds a certain level, your insurance company will pay you a monthly benefit.

Further, if you have an own occupation policy, you may be entitled to receive a monthly disability benefit if a serious injury or illness prevents you from working in your own occupation but can work in a different job.

C. Canada Pension Plan Disability Benefits:

If you are approved for CPP disability benefits, you will receive a letter which sets out your obligations while receiving benefits. You are entitled to earn some income from working before having an obligation to inform Service Canada of that income. Once your earnings reach a certain level, you may no longer qualify or your CPP disability benefits may be reduced to account for your employment earnings.

D. Ontario Disability Support Program:

The Ontario Disability Support Program (ODSP) pays disability benefits to Ontarians who meet certain financial eligibility criteria and are prevented from working by an injury or illness. If you are receiving disability benefits from ODSP (as with group insurance and private disability benefits), it is important to disclose your income from all sources. ODSP will not pay benefits if you can earn more than a certain level from employment.

How Many Hours Can You Work on Disability?

While some policies may say that if you work at all, you no longer qualify for long term disability benefits, the better question is whether you are regularly capable of working in your own or another job. The number of hours you work is relevant to an insurer when they consider whether you continue to be unable to work. For instance, if you work 3 hours per day, 2 days per week, this may be evidence that you are attempting to work but it is unlikely to support an argument that you are no longer disabled.

How Much Income Are You Able to Earn?

If the definition of disability is “any occupation”, you will no longer be entitled to benefits if you are able to perform a new job which will pay you a commensurate income. Commensurate income is sometimes defined in the policy. For example, the policy may say that if you can earn 60% of your pre-disability income at any job, you are no longer eligible for benefits.

Your Employment Options While Receiving Disability Benefits

Your insurance company may provide vocational rehabilitation training to assist you in recovering from your disability and returning to a new job. Rehabilitation may be offered by the insurance company at any time but is most common during the own occupation period. If your LTD insurer is supporting you in an attempt to return to work, they will usually integrate your income from employment along with your long term disability benefits so that your income from all sources cannot exceed your pre-disability income. These rehabilitation incentives continue for a limited time in order to encourage you to return to work if possible.

Returning to Work Part-Time: What You Should Consider

If you are receiving disability benefits and wish to return to work part-time, key considerations include:

• talking to your treatment team to see if they support you returning to work;
• asking your physician to carefully consider and outline any restrictions and accommodations which need to accompany an attempt to return to work such as shorter hours, avoiding certain tasks or avoiding consecutive days of work to allow recovery between days;
• avoiding overstating your ability to return to work to gain your doctor’s support – it is understandable to decide that you must return to work out of financial necessity regardless of your level of disability; however, if you underestimate the challenges and then fail to succeed in a return to work program, the insurer will rely on your statements to deny any further benefits.

Schedule a Free Consultation with Our Long Term Disability Claim Lawyer

Returning to work is a success story for you and your family if it is not pre-mature and it is done with careful planning and medical support. Book a free consultation with our experienced long term disability benefits lawyers to review your file and recommend the best course of action.