How Part-Time Work Can Reduce Your Long-Term Disability Benefits

Long-term disability (LTD) benefits are designed to provide financial support to individuals who are unable to work due to a serious illness or injury. However, as claimants recover or adapt to their condition, some may consider returning to work on a part-time basis. While resuming work can offer personal and professional fulfillment, it’s important to understand how part-time earnings can impact your LTD benefits.

Many LTD policies in Ontario contain provisions that allow claimants to work part-time while still receiving benefits. This flexibility is meant to encourage rehabilitation and gradual reintegration into the workforce. However, the income you earn from part-time work will almost always affect the amount of your LTD payments. Typically, insurers apply a reduction formula that offsets your benefits based on the income you earn, ensuring that the total combined income from your part-time work and LTD benefits does not exceed a certain threshold.

For instance, if you begin working part-time and earn $1,000 a month, your insurer may reduce your LTD benefits by a percentage of those earnings. Some policies have a dollar-for-dollar offset, meaning your benefits will decrease by the exact amount of your part-time earnings. Others might apply a partial offset, reducing your benefits by a portion of what you earn. It’s crucial to review the specific terms of your LTD policy to understand how this calculation is applied.

While part-time work can provide additional income, it may also raise questions from your insurer about your ability to return to full-time work. Insurers might argue that if you’re capable of performing some job duties, you could potentially transition back to your previous role or another position. This could lead to a reassessment of your claim, particularly if your policy includes a two-year mark where the definition of disability shifts from your "own occupation" to "any occupation."

Additionally, returning to work on a part-time basis could result in increased scrutiny of your condition. Insurers may request updated medical evaluations or independent medical examinations (IMEs) to determine whether your disability still meets the policy’s criteria. While these evaluations are standard, they can be stressful for claimants who feel their condition is not being fully understood.

If you’re considering part-time work while receiving LTD benefits, it’s essential to approach this decision with caution. Consult your healthcare providers to ensure that returning to work won’t negatively impact your health or recovery. It’s also a good idea to speak with a disability lawyer or advocate who can review your policy and advise you on how to proceed without jeopardizing your benefits.

Understanding how part-time work affects LTD benefits is critical to making informed decisions about your financial and professional future. While working part-time can be a positive step toward recovery, it’s important to balance this progress with the potential implications for your insurance coverage. Taking the time to review your policy, seek expert advice, and plan your next steps can help you navigate this transition successfully.

Long Term Disability Lawyer

Dealing with an LTD claim can feel overwhelming, particularly if you're already managing the challenges of a disability. Consulting with an experienced long-term disability lawyer can help you navigate the process, avoid common mistakes, and ensure you receive the benefits you deserve. A disability lawyer can review your policy, gather additional evidence, communicate with your insurer on your behalf, and build your case to ensure you receive a fair result.