When facing a long-term disability, concerns about your financial future can be overwhelming. One of the most pressing issues that arises when a Long Term Disability claim is denied is the fate of your pension. Let’s explore the implications of a denied Long Term Disability claim on your pension and discuss steps you can take to protect your financial well-being.

The Impact on Your Pension

While a denied Long Term Disability claim doesn’t directly affect your pension, it can have significant indirect consequences. 

Keep in mind that the impact of Long Term Disability on your pension varies depending on your employer’s policies and on your pension and it is best to reach out to your pension provider to understand what could happen to your pension if your Long-Term Disability Claim is denied. 

A few possible outcomes, include:

1. Stalled Pension Growth: During periods of inability to work, your pension may not continue to grow. This is because you’re not accumulating pensionable earnings or contributory service during this time. However, this is not always the case. You may be able to apply for a Disability Pension or the Free-Accrual of your pension contributions while you are disabled. 
2. Lump-Sum Settlements: If you successfully challenge the denial through a lawsuit and receive a lump-sum settlement, accepting this payment typically halts your pensionable earnings. Consequently, your pension value would remain frozen at the level it was when you stopped working due to disability. (This might not be the case if you are a Teacher in Ontario.)
3. Other Disability Benefits: It’s crucial to understand that being denied Long Term Disability benefits doesn’t automatically disqualify you from other forms of disability pensions, such as Canada Pension Plan (CPP) Disability Benefits. These programs have different qualification criteria and will still be accessible to you. In fact, it is important to be approved for CPP Disability benefits to ensure that your CPP Retirement Pension continues to accrue while you are not working due to disability. 
4. Taking a Reduced Pension: If you are forced to take an early reduced pension when your Long Term Disability claim is denied, you might still be eligible for Long Term Disability benefits but at a reduced monthly amount. It is best to speak with a disability lawyer, your insurer, and your pension provider to determine if you are entitled to your pension as well as disability benefits. 

Options After a Denial

If your Long Term Disability claim is denied and you are not well enough to return to your job, you generally have two main options. It is important you dispute the denial, not only to ensure you have an income while you are not able to work, but also to protect your employment and your pension:

1. Internal Appeal: You can file an internal appeal with the insurer. However, this option is often not recommended. It rarely results in a reversal of the decision and could delay a potential lawsuit and settlement. Every claim is different therefore it is best to have your denial reviewed by an experienced disability insurance lawyer. Sometimes appealing can result in a relatively quick approval if you have new and persuasive medical information to support your appeal.

2. Legal Action or Grievance: Commencing a lawsuit against the insurance company for wrongful denial of disability benefits is often the more effective route. What you might not know is that you do not need to first appeal the decision before suing your insurance company. Once your disability claim is denied, you can hire a lawyer to fight for your benefits for you.  

If you are unionized, you may or may not be required to grieve the denial of your disability claim.  It is best to speak with your union or a disability lawyer to find out what options are available to you and which option is best for you. 

Whatever option you choose, it is critical that you not quit your job. Doing so would result in serious losses to you and your employment benefits and possibly, even your pension.

Protecting Your Rights

Time is of the essence when dealing with a Long Term Disability claim denial. Here are some crucial steps to protect your rights:

1. Act Quickly: There are often strict deadlines for filing a lawsuit or submitting an appeal. In Ontario, you have two years from the date your claim was first denied. Don’t delay in seeking legal advice. Also, the longer you go without an income, the more financial and emotional stress you are likely to experience.

2. Consult a Disability Lawyer: A specialized disability lawyer can help you understand your options and guide you through the complex legal process. Most law firms will offer a free confidential consultation. Be sure you also understand the difference between a personal injury lawyer who knows a bit about disability cases and a disability lawyer who focuses solely on disability benefit disputes.

3. Document Everything: Keep detailed records of all communications with your employer, insurance company, and healthcare providers. This will be important if there is any question as to what you were told or what you understood during your claim and when it was denied.

4. Understand Your Employment Rights: If you’re terminated from your job while on disability leave, even if your Long Term Disability claim was denied, this could potentially be considered discriminatory under human rights legislation. A disability lawyer will be able to help you with this or refer you to an employment lawyer who is familiar with the interplay between disability and employment claims.

The Importance of Professional Guidance

Navigating the aftermath of a Long Term Disability claim denial can be overwhelming. The intricacies of disability law, pension regulations, employment and human rights, and insurance policies require specialized knowledge. A disability lawyer can provide invaluable assistance in:

– Discussing your options

– Evaluating the strength of your case

– Gathering necessary medical evidence

– Negotiating with insurance companies

– Representing you in court if necessary

Top 5 Things to Consider When Your Long Term Disability Claim is Denied

1. Immediate Action: Don’t wait to seek legal advice. The sooner you act, the better your chances of a successful appeal or lawsuit.

2. Documentation: Gather all relevant medical records, correspondence with your employer and insurer, and any other pertinent documents.

3. Alternative Benefits: Explore other disability benefit options, such as CPP Disability Benefits or short-term disability programs like Ontario Works or ODSP..

4. Employment Status: Understand your rights regarding job protection and potential accommodations if you’re able to return to work in some capacity.

5. Financial Planning: Consult with a financial advisor to understand the long-term implications of a denied claim on your overall financial health, including your pension. 

Protecting Your Financial Future

Dealing with a denied Long Term Disability claim while worrying about your pension can be a daunting experience. However, by understanding your rights, exploring all available options, and seeking professional guidance, you can navigate this challenging situation effectively.

Remember, your financial future is worth fighting for. Don’t hesitate to seek the help of a qualified disability lawyer who can guide you through the process of appealing a denial or pursuing legal action. With the right support and strategy, you can work towards securing the benefits you need and protecting your long-term financial well-being, including your pension.

Contact Mulqueen Disability Law in Markham for Trusted Guidance on Appealing a Long-Term Disability Claim Denial

If you’re facing a Long Term Disability claim denial and are concerned about its impact on your pension, reach out for professional assistance. Our team at Mulqueen Disability Law is here to help you navigate this challenging situation and fight for your rights.  With nearly 25 years experience dedicated to disability insurance litigation Courtney Mulqueen and her specialized legal team are focused on providing highly skilled, trauma-Informed legal representation to clients whose Long Term Disability claims have been denied or terminated.

Mulqueen Disability Law specializes in hard-to-prove long-term disability claims for “Invisible Conditions” such as mental illness (depression, anxiety, PTSD) and chronic conditions (pain, neurological, immunological, concussion, post-COVID)  Contact us for a free confidential consultation.

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, contact a lawyer specializing in disability law.