Understanding the Different Types of Benefits for Long-Term Disability
in Vancouver BC

1. LTD Insurance

   Long-term disability insurance benefits are just one type of income a disabled worker may be entitled to. However, in almost all cases, these benefits are far superior than all other types of disability benefits. Your long-term disability benefits will typically be 66% of your pre-disability gross income. Given the fact that these benefits are not taxable so long as you are paying the premiums yourself, your long-term disability will be very close, if not equivalent, to what you were earning net of taxes prior your disability.

2. CPP

   The Canada Pension Plan offers not just retirement benefits, but also disability benefits. There is no minimum age requirement for Canada Pension Plan Disability (CPP-D) benefits.

   You are qualified to receive the CPP-D benefits if you: • are under 65 • have contributed enough to the Canada Pension Plan • have a mental or physical disability that regularly stops you from doing any type of substantially gainful work • have a disability that is long-term and of indefinite duration, or is likely to result in death
   If you are eligible for long-term disability benefits, you will almost certainly also be eligible for Canada Pension Plan Disability benefits (CPP-D). Unfortunately, almost all long-term disability insurance policies make it a requirement that you apply for CPP-D. The policy will also say that all CPP-D benefits you receive are deducted dollar for dollar from your long-term disability benefits.
   Caution – do not be lulled into failing to apply for CPP-D knowing that it will not be money in your pocket, but only in the pocket of your insurance company. If you fail to apply for CPP-D, the insurance company will deduct from your long-term disability insurance benefits an amount equivalent to the CPP-D you would have received had you applied.
   There is no asset limit that would prevent eligibility. Your assets will not disentitle you.

3. PWD

   In British Columbia, the provincial government provide a form of income assistance referred to as “Persons with Disabilities” (PWD). As distinct from CPP-D above, if your assets exceed $100,000, not including your home or your vehicle, you are not eligible for PWD benefits. Even worse, these benefits are not tied to any income you may have previously been earning. Instead, the provincial government arbitrarily sets the amount.

   For example, you could get up to:
   

   • $1,358.50 if you are single
   • $2,423.50 if you and your spouse have Persons with Disabilities designation and have no children
   • $1,703.50 if you are a single parent with one child
   • $2,143.50 if you or your spouse have Persons with Disabilities designation and one child

   If you are receiving long-term disability benefits, you are not eligible for PWD. If you are receiving CPP-D, it will be deducted dollar for dollar from your PWD.

4. WorkSafe

   WorkSafe benefits are only payable if you are unable to work due to an injury you suffered while working. WorkSafe benefits are not taxable. If you are curious about how much you may be eligible to receive, please see this page for more information.

5. Disability Tax Credit

   The disability tax credit (DTC) is a non-refundable tax credit that helps you, or your supporting family member, reduce the amount of income tax they may have to pay.

   If you have a severe and prolonged impairment, you may apply for the credit. If you are approved, you may claim the credit at tax time.

   By reducing the amount of income tax you may have to pay, the DTC aims to offset some of the extra costs related to the impairment.

   You may be eligible for the Disability Tax Credit if a medical practitioner certifies that you have a severe and prolonged impairment in 1 of the specified categories, significant limitations in 2 or more of the specified categories, or receive therapy to support a vital function. To learn more about these categories and your potential eligibility, please see this page.