Receiving disability benefits through Veterans Affairs Canada (VAC) does not necessarily prevent you from qualifying for long-term disability (LTD) benefits. However, the interaction between different disability benefits can be complicated, particularly when your LTD coverage comes through an employer-sponsored group insurance plan.
For Canadian veterans, it is important to understand that VAC disability benefits and private LTD benefits generally serve different purposes and are governed by different eligibility requirements. Your eligibility for one does not automatically establish eligibility for the other.
If you are unable to work because of a disability, understanding how these benefits interact can help you protect your income and avoid unexpected issues with your long term disability claim.
What Are Veterans Affairs Canada Disability Benefits?
Veterans Affairs Canada provides disability benefits to eligible Canadian Armed Forces members and veterans, as well as certain other individuals who qualify under its programs.
VAC disability benefits are generally connected to a diagnosed medical condition or disability that is related to a person’s service. Depending on the circumstances, eligible recipients may receive Pain and Suffering Compensation or a Disability Pension. These benefits can be provided as monthly payments or, in certain circumstances, as a lump sum.
Importantly, receiving a VAC disability benefit does not necessarily mean that you are considered unable to work. The purpose and eligibility requirements of a VAC benefit are different from those associated with private disability insurance.
What Is Long-Term Disability Insurance?
LTD insurance is designed to provide income replacement when a person becomes disabled and cannot work as required under the terms of their insurance policy.
Coverage may come through an employer-sponsored group benefits plan or an individually purchased policy. The precise definition of disability varies between policies. Some plans initially focus on whether you can perform the essential duties of your own occupation, while others may eventually assess whether you can perform another occupation for which you are reasonably suited.
This means that qualifying for a VAC disability benefit does not automatically qualify you for LTD benefits. You must satisfy the definition of disability contained in your specific insurance policy.
Can You Receive Both Benefits?
In many circumstances, it is possible to receive both VAC disability benefits and LTD benefits. However, you should not assume that you will receive the full amount of both benefits.
Some LTD insurance policies contain offset provisions. These provisions allow the insurer to reduce LTD payments based on other sources of disability income. The exact treatment of VAC benefits depends on the wording of the policy and the nature of the benefit being received.
The Financial Consumer Agency of Canada notes that some disability insurance plans reduce benefits when a claimant receives other sources of disability income, and that the amount of benefits received from multiple plans may be subject to limits.
Before applying for LTD benefits, review your policy carefully to determine whether it contains an offset provision and which types of income may be deducted.
Does a VAC Disability Benefit Prove That You Are Disabled?
Not necessarily.
A VAC decision recognizing a service-related disability can provide important evidence about your medical condition and its relationship to your military service. However, an LTD insurer applies the specific definition of disability contained in your insurance policy.
For example, you could receive a VAC disability benefit for a condition while still being capable of working. If that condition later prevents you from performing your occupation, you may potentially qualify for LTD benefits if you meet the requirements of your insurance policy.
Conversely, receiving a VAC disability benefit does not automatically establish that you are unable to work for the purposes of an LTD claim.
The medical evidence should therefore address your actual functional limitations and explain how those limitations affect your ability to perform your occupational duties.
What If Your Disability Is Related to Military Service?
A service-related condition may form part of the medical basis for an LTD claim, but the insurer may still require evidence showing how the condition prevents you from working.
Medical records, specialist assessments, functional limitations, treatment history, and information about your occupational duties may all be relevant.
It is also possible for a veteran to experience a disability that is unrelated to their military service. A private LTD policy may cover that condition as long as the policy’s definition of disability and other requirements are satisfied.
The key issue is generally whether you meet the terms of the insurance contract rather than whether the condition originated during military service.
What About CPP Disability Benefits?
CPP disability benefits are another separate source of disability income that may apply to eligible Canadians.
To qualify for CPP disability benefits, an applicant generally must have a disability that regularly prevents them from pursuing substantially gainful work, and the disability must be long-term and of indefinite duration or likely to result in death. Sufficient CPP contributions are also required.
CPP disability benefits can also interact with private LTD benefits. Some LTD policies require claimants to apply for CPP disability benefits and may reduce LTD payments by the amount received.
Because the rules depend on the specific policy, it is important to examine the language of your insurance contract rather than assuming that receiving multiple benefits will increase your total monthly income.
What Should You Do If Your LTD Claim Is Denied?
If an insurance company denies your LTD application because you already receive VAC disability benefits, carefully review the insurer’s written decision.
The insurer should identify the basis for its decision. It may be arguing that you do not satisfy the policy’s definition of disability, that insufficient medical evidence has been provided, or that another policy provision affects your eligibility.
A long term disability claim denial does not necessarily mean you have no further options. Depending on the circumstances, you may be able to challenge the decision through an internal appeal, negotiation, litigation, or another appropriate process.
Do not overlook deadlines. Insurance policies and applicable laws can impose strict time limits, and delaying action can affect your legal rights.
Get Legal Advice Before Accepting a Decision
The relationship between VAC benefits and private LTD benefits can be difficult to navigate because each program has its own eligibility requirements and rules.
If you receive disability benefits through Veterans Affairs Canada and are considering applying for LTD benefits, review your insurance policy before assuming that you are ineligible. If your insurer has denied your long term disability claim, reduced your benefits, or applied an offset that you believe is incorrect, obtaining legal advice can help you understand the basis of the decision and your available options.
How We Help With Long-Term Disability Claims at Alam Law
At Alam Law, we understand how overwhelming it can be to deal with a disability while also navigating insurance requirements and financial uncertainty. We have extensive experience handling long-term disability claims and disputes across Ontario, including denied and terminated LTD benefits.
We work with you to understand your circumstances, gather and assess the medical and insurance evidence, communicate with insurers, negotiate for the benefits you may be entitled to, and pursue litigation when a fair resolution cannot be reached. We offer free case reviews and work on a contingency fee basis, so you do not pay legal fees unless we win your case. Our goal is to protect your rights and help you pursue the financial support you need while you focus on your health and recovery.