Disability benefits are available to Canadians through both private insurance plans and public government programs. The following is a list of some common forms of disability benefits:
Private Disability Insurance: These benefits are often available as a condition of employment. Other plans can be made available through associations or trade groups. These benefits (with the exception of mortgage and loan) are tied to income and are a percentage of a claimant’s pre-disability income. Private disability insurance is also available for purchase through an individual policy – typically for self-employed individuals or professionals needing a top-up to their employment-related coverage.
- Short-Term Disability Benefits: Private insurance plans often include short-term disability benefits, which provide coverage for a limited period (usually up to a year) following the onset of a disability. These benefits typically replace a portion of the individual’s income while they are unable to work due to their disability.
- Long-Term Disability Benefits: Some private insurance plans also include long-term disability benefits, which provide coverage for an extended period. Coverage is either provided for a capped period (2, 3, or 5 years for example) or until age 65. Entitlement to these benefits, however, is contingent on a variety of factors often found within the contract of insurance. See: Why are disability benefits denied?
- Mortgage or Loan Insurance: Some mortgages, loans, and lines of credit are insured in case of disability or death. These benefits will typically cover principal payments, and occasionally principal and interest payments, on a lump sum basis or for as long as the claimant remains disabled.
Public Disability Benefits:
- Canada Pension Plan (“CPP-D”) Disability Benefit: This federal program provides financial assistance to individuals who have made enough contributions to the CPP and who are unable to work regularly due to a severe and prolonged disability. CPP Disability Benefits are payable monthly and are adjusted annually based on changes in the cost of living. To qualify, applicants must meet specific eligibility criteria, including having a severe and prolonged disability, being under the age of 65, and having made sufficient CPP contributions. In addition to the personal benefits available through CPP-D, there are child benefits that are also available.
- Disability Tax Credit (“DTC”): The DTC is a tax credit designed to provide financial assistance to individuals with disabilities or their supporting family members. It aims to alleviate some of the financial burdens associated with living with a disability. To be eligible for the Disability Tax Credit, individuals must have a severe and prolonged impairment in physical or mental functions, significantly affecting their ability to perform basic activities of daily living or requiring an excessive amount of time for life-sustaining therapy.
- Qualifying for the Disability Tax Credit may also make individuals eligible for other federal, provincial, or territorial benefits and programs, such as the Registered Disability Savings Plan (RDSP) or certain provincial disability assistance programs.
- Provincial and Territorial Disability Programs: Each province and territory in Canada may offer additional disability benefit programs to supplement federal benefits or provide support tailored to the needs of residents. These programs may include income support, healthcare coverage, vocational rehabilitation services, and other forms of assistance for individuals with disabilities. Eligibility criteria and benefit amounts vary depending on the jurisdiction.
- Specifically, in Ontario, residents can apply for the Ontario Disability Support Program (“ODSP”) and in Alberta, residents can apply for the Assured Income for the Severely Handicapped (“AISH”). In addition to meeting the relevant test for disability, these benefits typically require being financially destitute (limited or no assets, such as property ownership, etc).
The intention of disability benefits in Canada is to provide crucial financial support and assistance to individuals with disabilities, whether through private insurance plans offered by employers or public government programs. These benefits aim to help individuals maintain their quality of life and meet their basic needs despite the challenges posed by their disabilities.
