Getting Back to Work – How Will Returning to Work Affect my LTD Claim?

Navigating the long-term disability (“LTD”) process can be difficult and confusing, especially when the lines blur between employment law and LTD benefits.

Can I receive LTD benefits while I am working?

Generally speaking, the purpose of LTD benefits is to compensate for lost wages due to an injury or illness, which prevents you from working. You might be able to receive LTD benefits while working, but it depends on the situation.

Not all LTD policies are the same, however, most policies have two tests for disability. The first is the “own occupation” test, which typically applies for the first two years of your disability. In that case, you will be entitled to benefits should you be unable to perform the essential tasks of your pre-disability job.

When you initially apply for LTD benefits, your insurer will ask the following question: are you unable to perform the substantial duties of your own occupation? “Own occupation” means the job you were working at the time of your injuries. Working in another job while on LTD may not affect your entitlement so long as your wages stay under a certain percentage of your pre-injury earnings. The percentage will depend on the terms of your policy.

After a period of time (typically two years), a second, more stringent test applies for those who wish to continue receiving LTD benefits. This test, often referred to as the “any occupation test”. After two years, the insurer will now ask: are you unable to perform the substantial duties of any occupation? “Any occupation” means any job that you are “reasonably suited to” due to your education, training, and experience. This test considers your educational background and how transferable your skills would be to another line of work. It considers the status and reward of your pre-accident occupation.[1] Salary and years of experience may be a factor. For example if your entire working life has been spent performing physical labour, you might argue that you are not suited by means of education, training, and experience to work in a desk job. The nature of your injuries are an important consideration.

Under this test, it is harder to both work and receive LTD benefits, because it captures more possible job opportunities that you might be able to do. Your LTD provider will likely ask for new medical documentation to prove that you cannot work in any job.

If you succeed under the “any occupation” test, then your LTD benefits may carry on until you can return to work or until the age specific within your policy (often to age 65). It may be possible perform some work under a certain percentage of your pre-accident earnings, again depending on the terms of your policy.

I am currently receiving LTD benefits – can my LTD insurer force me back to work?

Your LTD insurer and your employer cannot force you back to work. However, your LTD insurer can terminate benefits if they do not think you meet the applicable criteria. They may implement a gradual or immediate return to work.

If you do not feel ready to return to work, due to your injuries or illness, it is important to express that concern to care providers and to communicate with your LTD insurer. If your LTD insurer is not responsive to your concerns, you may want to seek legal advice on disputing their position. 

Can my employer fire me because I am on LTD?

An employer cannot fire you because you are on a disability leave and receiving LTD benefits. This would be discriminatory, and expose your employer to a wrongful dismissal lawsuit.

However, this does not mean an employer cannot fire you at all. An employer can fire an employee while they are receiving LTD benefits for reasons unconnected to their disability.

Example: A nurse is off work and receiving LTD benefits. Her employer fires her due to an incident that occurred before she went on leave.

If you are terminated while receiving LTD benefits, make sure to keep any documentation provided to you and take note of reasons given. If the reason provided is related to your disability, injury or illness, or your absence due to a leave, you may consider speaking with a lawyer about a potential wrongful dismissal lawsuit.

Oatley Vigmond is Ontario’s Personal Injury Law Firm.  If you or someone you know requires assistance with a Long-Term Disability claim, we may be able to help.

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[1] “Disability Insurance Law in Canada”