What Is Short Term Disability and How Does It Work in Canada?
If you’ve been injured or diagnosed with a serious medical condition that keeps you off work, one of the first questions you might ask is: What is short term disability, and how much does short term disability pay? Short term disability (STD) is a critical safety net, designed to provide financial support when you can’t work due to health issues. Whether STD pays you 100% of your salary or a portion of it depends on your specific policy. Understanding how short-term disability works can mean the difference between peace of mind and added stress during an already difficult time.
What is Short Term Disability?
Short term disability is an income replacement benefit that is available through your employer’s group insurance plan. The STD benefit can pay you up to six months if you’re unable to work due to a medical condition. As the name suggests, STD is meant to cover you for a finite period before long term disability kicks in.
How much does Short Term disability pay?
STD can pay you up to 100% of your weekly salary or could be based on a portion of your income. If the benefits are paid by your employer, they will be taxable. Some policies may stagger the STD payments. For example, short term disability payments could be 100% of your income for the first four weeks and then drop to 75% of your weekly income for the remainder of the period.
Each policy is different so it’s important to check your benefits package to see what your STD coverage is.
Are there exceptions to receiving STD benefits?
Offsets can apply as employees aren’t entitled to different income benefits for the same period. If you’re unsure in deciding whether you should be applying for STD, WSIB or EI sick benefits, it’s best to consult a lawyer to help explain the right options.
When do you start collecting?
After an application is submitted, there is a “waiting period” which can last up to 7 days before benefits become payable. If the insurer approves your application, you should begin receiving benefit payments on a weekly or bi-weekly basis. If it takes the insurer longer to approve your application, you’ll receive a lump sum of the total arrears owed. The benefits will stop once you have reached the maximum STD period. This is when you’d consider applying for long term disability.
Why is it important to speak to a disability insurance lawyer?
If you’re unsure how to apply for STD or if you’ve applied and the insurer has denied your STD claim, contact us today. We offer a free consultation for short and long-term disability claims. Contact us online or call 416 640 2667.
Author – Aman Chaggar