If you are receiving long-term disability (LTD) benefits in Ontario and are later approved for CPP disability (CPP-D), it is expected that your insurer will adjust your monthly payments.

What is not expected—and something we are seeing more frequently—is that the adjustment is being done incorrectly.

At Mulqueen Disability Law, we have identified a growing issue where insurance companies are miscalculating CPP-D offsets, resulting in clients being underpaid on their LTD claims.

These errors are often buried in the insurer’s calculations and go unchallenged—but they can have a significant financial impact over time.

How the CPP-D Offset Is Supposed to Work

Most LTD policies allow the insurer to deduct certain other sources of income, including CPP-D benefits. This is commonly referred to as an “offset.”

The purpose of the offset is to ensure that your total disability income remains within the percentage set out in your policy.

If you are unsure how LTD benefits are calculated more generally, you can read more here:
– Long-term disability benefits in Ontario: https://mulqueendisabilitylaw.com/wp-content/uploads/2023/12/LTD-Appeals-Guide.pdf

You can also learn more about common issues in disability claims here:
– https://mulqueendisabilitylaw.com/services/ltd-litigation/

In simple terms, if you receive income from another source — like CPP-D — your insurer is typically allowed to deduct that amount from your monthly LTD payment.

For example:

• LTD benefit: $3,000/month
• CPP-D benefit: $1,200/month
• Insurer pays: $1,800/month

The total income remains the same — but the insurer pays less.

This is standard, and in most cases, it is contractually permitted.

But the key question is not whether an offset applies.

It is how the insurer calculates the amount they are entitled to deduct.

Where Things Are Going Wrong

CPP-D benefits increase over time.

According to Service Canada, CPP disability payments are adjusted annually to reflect cost-of-living increases:
– https://www.canada.ca/en/employment-social-development/programs/pension-plan-disability-benefits.html

We are now seeing insurers take advantage of that increase in a way that is not supported by most LTD policies.

Instead of using the amount of CPP-D that was payable when the claimant was first deemed disabled, insurers are using the current, higher CPP-D amount when calculating the offset.

That distinction matters.

Your LTD entitlement is tied to a specific period of disability. The offset should reflect the CPP-D benefit as it relates to that same period—not increases that occur years later.

By using the current CPP-D amount, insurers are effectively increasing the deduction over time, even though your entitlement under the LTD policy has not changed.

Why This Results in Underpayment

CPP-D increases are meant to account for inflation—not because your disability has changed.

Your LTD benefit, on the other hand, is based on your pre-disability income and the terms of your policy.

If your benefits have been reduced or your claim has been questioned, you can read more here:
– LTD claim denial or reduction:https://mulqueendisabilitylaw.com/long-term-disability-denied/

These are two separate systems.

In many cases, insurers are not entitled to reduce LTD benefits based on CPP-D cost-of-living increases that occur after the initial entitlement date.

For example, if your CPP-D was approved in 2026 but includes retroactive payments to 2025, then it is the 2025 monthly CPP-D amount that your LTD insurer may deduct going forward—not the higher 2026 amount.

You keep the annual increases to your CPP-D benefit.

When this distinction is ignored, the result is simple:

You are being underpaid on your long-term disability claim.

Dependent Benefits Are Also Being Improperly Deducted

Another issue we are seeing relates to CPP-D benefits paid for dependent children.

CPP-D provides additional monthly amounts for eligible dependents. According to Service Canada, these benefits are separate from the disability benefit paid to the claimant:
– https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-childrens-benefit.html

Despite this, some insurers include dependent benefits in the offset calculation.

Whether this is permitted depends on the specific wording of the LTD policy. In many cases, the policy only allows deductions for benefits payable to the claimant—not to their children.

If dependent benefits are being deducted, your LTD payments may be incorrectly reduced.

Overpayments and Retroactive CPP-D Awards

When CPP-D is approved, it is often paid retroactively.

Insurance companies will typically request repayment for the same period, claiming an overpayment.

That is not unusual.

What is concerning is how often these overpayment calculations are incorrect.

We regularly see insurers:

• using the wrong CPP-D amount
• applying the wrong time period
• overstating the repayment owed

Before repaying anything, it is important to understand how the figure was calculated.

You can read more about how insurers handle LTD claims here:
– https://mulqueendisabilitylaw.com/ltd-blog/insurance-companies-worsen-mental-health-ltd-claims/

A Pattern Worth Paying Attention To

These issues are not isolated.

We are seeing a consistent pattern of insurers applying CPP-D offsets in a way that reduces LTD benefits more than the policy allows.

Because these calculations are rarely explained clearly, many claimants assume they are correct.

That is not always the case.

If your LTD payments changed after CPP-D approval and something does not seem right, it is worth taking a closer look.

What You Should Do If You Suspect a Miscalculation

If you’ve been approved for CPP-D and your LTD payments changed, you should take a closer look.

Start by requesting a detailed breakdown of how the insurer calculated the offset. Confirm your CPP-D start date and the amount you were initially entitled to receive.

Compare that to what the insurer is currently deducting.

If dependent benefits are being included, that should also be reviewed carefully.

Most importantly, do not assume the insurer’s numbers are correct—and do not rush to repay any alleged overpayment without understanding how it was calculated.

If something does not make sense, it is worth getting advice.

Speak With an Ontario Disability Lawyer

At Mulqueen Disability Law, we focus exclusively on long-term disability claims in Ontario.

We regularly help clients identify calculation errors, challenge improper CPP-D offsets, and recover underpaid benefits.

– Contact a disability lawyer in Ontario today:https://mulqueendisabilitylaw.com/contact/

Further Information

For more information about CPP disability benefits and how they interact with LTD claims:

• CPP disability benefits overview (Government of Canada):
  👉 https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-disability-benefit.html
• CPP children’s benefits:
  👉 https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-childrens-benefit.html
• Long-term disability benefits in Ontario:
  👉 https://mulqueendisabilitylaw.com/long-term-disability/

Frequently Asked Questions About CPP-D Offsets and LTD

Can my LTD insurer reduce my benefits after CPP-D approval?
Yes, but only by the amount permitted under your policy. The calculation must be done correctly.

Should my insurer use my current CPP-D amount?
In many cases, no. The offset should be based on your initial CPP-D entitlement, not later increases.

Do CPP-D cost-of-living increases reduce LTD benefits?
Generally, they should not. These increases are tied to inflation and are separate from your LTD entitlement.

Can dependent CPP-D benefits reduce my LTD payments?
Not always. Many policies do not allow deductions for benefits paid to your children.

What should I do if my LTD benefits seem too low?
Request a breakdown of the calculation and speak with a disability lawyer to review your claim.

Contact Us

If you have questions or concerns about your LTD benefits, we can help you guide you and protect what you fought hard to obtain.

Mulqueen Disability Law is a boutique law firm, focused on litigating long-term disability insurance benefit claims. Courtney Mulqueen and her team of legal professionals are Trauma-Informed Certified and have over two decades of experience exclusively in the area of long-term disability law. She and her team draw on their “insider” experience working for the insurance companies (including, Canada Life, Sun Life, Manulife, and OTIP), that they now sue for their clients.  

The preceding is not intended to be legal advice. This blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog, you understand that there is no solicitor client relationship between you and the blog publisher. The blog should not be used as a substitute for competent legal advice from a licensed lawyer in your jurisdiction. If your disability claim has been denied and you require legal advice, please contact a lawyer specializing in disability law.