Can You Work While on Long-Term Disability in Ontario?
If you’re on long-term disability (LTD), you’re likely facing a paradox: you can’t fully work, but you might still need to earn. That tension between health limitations and financial necessity leads many Ontarians to ask, can you work while on long-term disability in Ontario?
The answer? Possibly—but with caution. Working while on long-term disability isn’t off-limits, but it is tightly regulated. The terms of your coverage matter. So do the specifics of your job, your income, and even how your condition is documented. Cross the wrong line—even unintentionally—and you could lose your LTD benefits entirely.
According to Canada’s official guidelines on long-term illness and disability, returning to work while receiving disability benefits is sometimes permitted—but it must align with your insurer’s terms and your specific long term disability insurance coverage.
Let’s unpack what those terms really mean.
What LTD Policies Actually Say
While disability is commonly defined in medical terms, long-term disability policy definitions are contractual. Most plans divide coverage into two stages:
- Own Occupation Period (typically the first 24 months): You’re considered disabled if you can’t perform the essential duties of your own job, under your own occupation policy.
- Any Occupation Period (thereafter): You must be unable to work in any reasonably suitable job—based on your education, training, and experience—as defined by your broader occupation policy or occupation coverage.
The way your insurance policy defines “disability” changes over time. At first, you’re considered disabled if you can’t do your own job. During this phase, you might be able to do some light or part-time work and still keep your benefits, as long as it’s clear you can’t go back to your regular role.
But after a certain point—usually after two years—the definition shifts. Now you have to be unable to do any job you’re reasonably qualified for. At this stage, even small jobs could be used to argue that you’re no longer disabled.
And that’s often when insurers start taking a closer look at your claim.
How Short-Term Disability Benefits Set the Stage
Long-term disability rarely appears out of nowhere. For most, it begins as something more manageable—a surgery recovery, a flare-up, or a string of unwell days that don’t resolve. This is where short-term disability (STD) benefits come into play.
Most STD plans cover between 60% to 100% of your income for a fixed period, often 15 to 26 weeks, depending on your employer’s policy or insurance provider, based on the assumption that the interruption to your ability to work is temporary.
But when recovery stalls—when your condition persists or worsens—what started as short-term suddenly becomes something else. Insurers don’t treat these stages as separate. They treat them as a continuum.
If you’re dealing with the same STD and LTD insurer, your treatment plan, physician notes, adherence to medical advice, even missed follow-ups become part of the evidence trail when you apply for LTD. If your insurer sees gaps, delays, or inconsistencies in your STD documentation, they may view your long-term claim with skepticism.
This is especially true for conditions that are harder to “see”—like chronic pain, mental illness, or neurological issues. These often require layered, sustained documentation and clear medical narratives over time. Which is why, from the first sick day onward, your approach matters.
If your short-term disability is denied or terminated early—don’t just appeal blindly. Understand what’s at stake. Consult someone who can assess your current situation in the context of what may come next. A missed step here can quietly undermine your eligibility later.
Can You Work While Receiving a Monthly Disability Benefit?
While not recommended, you may—but only if your policy allows it, your insurer approves it, and your earnings stay within permitted thresholds.
Many disability insurance plans offer rehabilitation incentives—designed to help you ease back into the workforce without losing your LTD benefits overnight. These can include:
- Partial disability payments while working reduced hours
- Income top-ups until your earnings reach a certain percentage of your pre disability income
- Reinstatement rights if a return-to-work attempt fails
Certain situations, like failing to disclose a new job or exceeding income limits, can lead to a reassessment, or worse, termination of benefits.
The Numbers: What You’re Allowed to Earn
Policies will contain a commensurate income. This means if you earn above the commensurate amount, the LTD insurer is no longer responsible for paying you a benefit as you have successfully obtained gainful employment and appropriate income. If you are below the commensurate amount, the LTD insurer could still be on the hook for benefits going forward.
Some policies will contain a commensurate amount of 50–70% of your pre disability earnings s, while others offset disability payments from what you earn dollar-for-dollar. In rare cases, benefits are unaffected—initially. But as your income climbs, your insurance company may argue that you’re no longer considered disabled under the plan.
What about hours? There’s no universal cap. Insurers focus less on the hours worked and more on how the work aligns—or conflicts—with your declared limitations. You might technically work 10 hours a week, but if the nature of the job contradicts your stated disability, that’s enough to jeopardize your claim.
In other words, it’s not just what you earn. It’s what your work says about your performance and actual abilities. And how those combined abilities and wages might be interpreted.
What Happens If You Work Without Telling Your Insurer?
Attempting to work while receiving LTD—without disclosure—can be treated as fraud. And while that might sound harsh, insurers have a legal obligation to prevent overpayments and protect the integrity of their long-term disability coverage. You as an insured have a duty to report it to your insurer.
Even honest mistakes—like cash jobs, informal gigs—can trigger serious consequences. Once flagged, your insurer may launch a review, suspend benefits, or demand repayment.
Here’s where many claimants go wrong: they assume small income doesn’t count. It does.
Strategic Considerations: When and How to Return to Work
Returning to work can be part of a broader recovery plan, especially when supported by your physician and insurer, however, insurance policies are filled with conditions, exceptions, and clauses that can shift the goalposts without warning.
The right move? Seek advice. Before starting a different job, modifying duties, or accepting freelance income, get legal clarity.
At Whitten & Lublin, we review LTD policies through a strategic lens—considering how your efforts to return to work may impact your insurance policy, eligibility, and long-term financial stability. We can help you avoid missteps.
And if your insurance provider denies or reduces your disability claims unfairly, we’re prepared to act—quickly, strategically, and with force.
Your Next Step: Know Before You Act
Every move you make—working, disclosing, earning—sends a signal to your insurer. Make sure that signal aligns with your medical condition, policy terms, and long-term strategy.
This isn’t just about whether you can work. It’s about whether working aligns with your legal rights, medical needs, and financial future.
If you’re unsure, don’t wait. Contact Whitten & Lublin for a free disability consultation. We’ll review your situation, explain your rights, and help you move forward—on your terms.
Need guidance on disability insurance claims? Call us at 416-640-2667 to schedule a consultation with a Disability Lawyer today.