When illness or injury prevents you from working, you may be eligible for two types of disability benefits in Canada: 1) Canada Pension Plan Disability (CPP-D) – a federal government program, and 2) Private Long-Term Disability (LTD) – provided through an employer or individual insurance policy. Many Canadians qualify for both programs, but few understand how they interact. Knowing the differences, overlaps, and pitfalls can protect your income and strengthen your claim.
In this guide, we break down how CPP-D and LTD benefits work, what happens when you receive both, and why getting help from a disability lawyer such as Kotak Law can make a significant difference.
Understanding the Two Programs
CPP-Disability (CPP-D)
– Administered by: Service Canada under the federal Canada Pension Plan.
– Funded by: Mandatory payroll contributions from employees and employers.
– Eligibility: Must have a severe and prolonged disability that prevents you from any substantially gainful employment, and must have made sufficient CPP contributions.
– Payment: Monthly benefit (average around $1,100–$1,500/month in 2025), adjusted annually.
– Taxable: Yes — CPP-D benefits are taxable income.
– Medical review: Periodic reassessments by Service Canada.
Private Long-Term Disability (LTD)
– Administered by: Insurance company (through employer group plan or individual policy).
– Funded by: Premiums paid by employer, employee, or both.
– Eligibility: Usually requires being unable to perform your own occupation for the first 24 months, then any occupation afterward.
– Payment: Percentage of your pre-disability income (often 60–70%).
– Taxable: Depends on who paid the premiums—taxable if employer-paid, non-taxable if employee-paid.
– Medical review: Regular updates, sometimes surveillance or insurer-appointed assessments.
Key Differences Between CPP-D and LTD
| Feature | CPP-Disability (CPP-D) | Private Long-Term Disability (LTD) |
|---|---|---|
| Administered by | Service Canada (government) | Private insurance company |
| Definition of Disability | “Severe and prolonged” – unable to perform any gainful occupation | Usually starts as ‘own occupation’ (first 24 months), then ‘any occupation’ |
| Source of Funding | CPP contributions | Insurance premiums |
| Tax Status | Taxable | Usually non-taxable if employee paid premiums |
| Medical Evidence | Submitted to Service Canada | Submitted to insurer, ongoing updates |
| Appeals | Social Security Tribunal | Courts or negotiated settlements |
| Surveillance | None | Possible insurer surveillance or assessments |
How the Two Benefits Interact
Most LTD policies require that if you qualify for CPP-D, you must apply for it. If approved, the LTD insurer offsets your CPP-D payments from your LTD benefits. For example, if your LTD benefit is $3,000/month and CPP-D pays $1,200/month, the insurer will now pay $1,800/month so your total remains $3,000. This offset reduces the insurer’s costs but not your total income. Importantly, CPP-D approval can strengthen your LTD claim since the federal program has a stricter definition of disability.
Common Problems Claimants Face
- Delays and conflicting decisions between CPP-D and LTD approvals.
- Overpayment demands when retroactive CPP-D payments overlap LTD.
- Medical report inconsistencies causing confusion between programs.
- Appeal fatigue managing two bureaucratic systems.
- Insurer pressure to apply for CPP-D or threats to suspend benefits.
Why You Should Apply for Both (With Legal Guidance)
Applying for both programs strategically can benefit you. CPP-D provides a backup income source, adds credibility to your disability status, and may protect your future CPP retirement benefits. However, timing, consistency of evidence, and accurate wording in medical forms are critical. Errors can lead to denial or repayment demands. A disability lawyer ensures both applications align and protect your rights.
How a Disability Lawyer Can Help
At Kotak Law, we regularly assist clients navigating both CPP-D and LTD claims. We:
– Coordinate both applications so medical information is consistent.
– Challenge insurer offsets or overpayment calculations.
– Appeal LTD denials while maintaining CPP-D benefits.
– Protect limitation periods for legal action.
– Negotiate fair lump-sum settlements that consider offsets correctly.
What to Do if Your LTD or CPP-D Claim Is Denied
– Don’t handle it alone. Denials are common and time-sensitive.
– Skip the insurer’s internal appeal—it’s reviewed by the same insurer.
– Contact Kotak Law immediately for legal advice.
– We’ll review your policy, denial letter, and medical evidence to build a strong strategy.
Key Takeaways
✅ CPP-D is federal; LTD is private.
✅ Approval for one can support the other.
✅ LTD insurers offset CPP-D payments.
✅ Mismanaging timing can cause repayment demands.
✅ Legal guidance ensures consistency and full protection.
Talk to Kotak Law Today
If your disability claim has been denied, delayed, or reduced because of CPP-D or LTD overlap, we can help. Our experienced disability lawyers represent clients across Ontario and Canada, fighting for fair benefits.
Call: (416) 816-1500 or 1-888-GOKOTAK
Book a Free Case Review: https://www.kotaklaw.com/describe-your-claim/
Contact Us: https://www.kotaklaw.com/contact/
