The Differences Between Short-Term and Long-Term Disability

If you’re injured or ill and need to miss work for an extended time, you may have two main options in Ontario: short-term disability (STD) or long-term disability (LTD) benefits. Both are basically income extensions offered by a private group plan or through an employer’s benefits package. Both replace a portion of your income, or even your entire income, with a generous plan when you can’t work.

So, long-term vs. short-term disability benefits: which one’s right for you? Read on. The team at Derek Wilson Personal Injury Law has put together this free resource to help you understand the differences between short-term and long-term disability so you can apply for the right benefits. And if you ever encounter problems and find yourself denied benefits, you can always contact Derek Wilson Personal Injury Law for a free consultation with a Hamilton benefits lawyer. Our team is here to help you get the benefits you need.

Disability Claims Overview

In Ontario, you have different options if you’re unable to work due to mental or cognitive conditions, physical injury or illness, and some additional medical conditions, such as post-surgery recovery. You may have access to some government benefits or benefits provided by your employer or through a group plan.

Benefits offered through a group plan or through your work tend to be more generous. The most common disability claims you can make are through workers’ compensation, short-term disability, and long-term disability. Workers’ compensation pays part of your wages if you can’t work due to an illness or injury you sustained on the job. It also pays for all medical costs not covered by your provincial healthcare.

Both short-term and long-term disability are for situations where you’re injured or ill and can’t return to work immediately but are expected to return to work eventually. Your injury or illness doesn’t have to be work-related. Medical conditions such as complications in pregnancy are covered, too, for example. Unlike workers’ compensation, short-term and long-term disability cover just wage losses.

Some workplaces also offer sick leave. This is intended for very temporary illness, and some benefit plans require you to use up your sick days first before applying for short-term or long-term disability.

If you don’t qualify for any of the benefits mentioned above and your employer doesn’t offer short-term and long-term disability benefits, you may qualify for Employment Insurance (EI) Sickness Benefits. This government program will pay you up to 55% of your income, capped at no more than $688 a week if you can’t work for medical reasons. You can receive these benefits for up to 26 weeks.

For longer-term disability and injury, you may qualify for Canada Pension Plan disability benefits if you’ve contributed to the Canada Pension Plan. With this government plan, you may receive up to a maximum monthly amount — this number was $1,606.78 as of 2024 — while you can’t work.

What Is Short-Term Disability?

Short-term disability is specifically for medical conditions where you are expected to return to work within a few months up to six months in most cases—or up to a year in the case of a few generous plans.

Short-term disability can be for mental or cognitive conditions such as depression or PTSD, where you may be able to return to work after some months of treatment. It can also cover you if you need to take time off work after chemotherapy treatment or surgery or if you have pregnancy complications and need bed rest. This benefit also covers medical conditions from which you’re expected to recover relatively quickly, such as a broken bone.

What Is Long-Term Disability?

As the name implies, long-term disability is for medical conditions where you won’t be able to return to work for some time. If you have a cancer diagnosis, for example, or have suffered a permanent disability that affects your mobility, you may qualify for long-term disability benefits.

The Differences Between Long- and Short-Term Disability

While both long-term and short-term disability benefits effectively replace your income when you can’t work and can’t earn, there are significant differences between the two:

How Long You’ll Wait

With short-term benefits, the goal is to get you benefits quickly so you can cover your expenses and return to work. As a result, you will apply by sending in medical documentation and your claims forms and wait to hear back. There’s no guarantee about how long it will take, but it’s not unusual to get a decision about your claim within 10 business days.

With long-term benefits, you’ll be waiting longer. These benefits involve a larger investment for insurance companies, so they tend to investigate your claim in more detail. It’s not unusual to wait three months or as long as a year for benefits, and this can take longer if your claim is denied or if you need additional medical documentation.

The good news is that you can apply for short-term disability benefits or EI Sickness Benefits while you wait for a reply.

How Much You’re Paid

Short-term disability benefits can pay anywhere from 60% to 100% of your income while you heal while LTD benefits pay 60% to 80% of your earnings. Some long-term policies also have a monthly maximum, so if your plan has a $2,000 cap, you will not receive more than that, even if 60% of your earnings amount to more than $2,000.

In addition, some long-term disability plans have the option to increase your benefits. If this is an option for you, you can choose to accept a lower benefit (say, 60% of your earnings), or you can choose to pay premiums each month you’re healthy so that if you ever can’t work, you’ll get up to 70-80% of your monthly pay.

How Long You’ll Receive Benefits

Most short-term disability benefits are paid from three months to six months, though some can pay you for up to a year. If you get well and can return to work before this time, your benefits will stop.

Long-term benefits can pay for the maximum period of the policy. Depending on the plan, this may be anywhere from 2 to 10 years or even longer. As with the short-term plan, your benefits will end if you heal enough to return to work or can return to your job with modified duties.

How Benefits Are Paid

Long-term disability payments are usually paid weekly, while long-term disability payments are usually paid monthly or sometimes twice monthly.

Who pays is also different. Many short-term disability plans are paid for by the employer. The way it works is that the insurance company takes your paperwork and reviews your claim, then reaches a decision. Without sharing your medical information, the insurer will tell your employer whether your claim has been approved or denied. If it’s approved, your employer will pay your benefits. This arrangement is known as an Administrative Services Only (ASO) contract.

Sometimes, larger employers choose the same ASO contract arrangement for long-term disability coverage. More commonly, this benefit is paid for by the insurer. This means the insurer is the administrator of the policy. They investigate your claim, decide whether to approve or deny the claim, and pay you if your claim is approved.

How Your Disability is Defined

To get disability benefits, you must have “total disability,” meaning you can’t work. However, how this is defined varies from policy to policy.

With most short-term disability policies, you must be able to show that you can’t do your own job. In some plans, you must also show you can’t do similar roles. For example, if you work as a developer in an office, you must show that you can’t sit and work at a computer, and you may also need to prove you can’t work at other office jobs—doing administrative duties, for example.

Some long-term disability policies have also been set up in this way. More commonly, the definition changes over time. For a set period — for one or two years, for example, depending on the policy — you get benefits if you are “totally disabled” and can’t perform your own work duties or similar work duties.

After that time, though, this changes. Instead, the insurer considers whether you can perform any occupation for which you’re qualified or for which you could acquire the skills. In other words, the insurer may work with you on a back-to-work plan, where you’re presented with other occupations you could do with a little training. If you qualify for these, your benefits could end.

It’s important to note that you don’t have to be fully disabled and unable to do any part of your job. The test for “total disability” is whether you can complete the most basic or core tasks at your job. For example, if you’re a librarian, part of the test might be to determine if you can move about the stacks, help patrons, stack books, and check out books.

There is that second definition of disability for long-term disability, too. For the insurer, the test of “total disability” eventually determines whether you can do the core functions of any job that you could reasonably train for or get. For example, if you’re a librarian, after two years or more, the insurer may determine that even if you can’t perform the core tasks of a librarian, you may be able to offer library support virtually from home or may be able to teach virtual classes.

Long-Term vs. Short-Term Disability: Which Claim is Right for Me?

Read the paperwork and brochures that your employer likely provided about your benefits. These should clearly outline any benefits you have and when you qualify for each.

In general, you will apply for short-term disability benefits if you expect to recover from your injury in a specific timeframe. For example, if you’re recovering from heart surgery, your doctor may predict you will return to work in a month based on the outcomes of other patients in your same age range.

Of course, there are few guarantees in medicine. You could go into the hospital for abdominal surgery and expect to recover in a few weeks, only to develop an infection that leaves you permanently in severe pain.

In addition, some conditions are notoriously hard to predict. Some cancer patients go into remission in months, and others find their cancer metastasizing, so they battle their condition for years. Similarly, cognitive and mental health conditions can be very difficult to predict.

Fortunately, your doctor doesn’t have to be perfect in predicting when you will return to work. When you apply for disability benefits, your doctor will make a note on the paperwork describing how long your treatment and condition are expected to last. However, this prognosis can be updated over time. In addition, your doctor can simply indicate that your condition does not have a specific timeline, and it’s not possible to predict when you will be healed enough to return to work.

If your condition is open-ended in this way, with no clear return date, or if you are expected to heal in six months or less, it’s best to apply for short-term disability benefits. If your condition ends up being more long-term, you have the option of applying for long-term disability benefits later.

In a situation where you are seriously injured and aren’t expected to make a full recovery that will allow you to return to work, you may want to start the claim process for long-term disability benefits. These benefits give you time to heal as much as possible and to get job training, if you qualify, for a modified or new position.

When to Reach Out to a Short-Term Disability Lawyer

Disability benefits are an important lifeline when you’re seriously injured or ill. They help you cover your bills so you can focus on managing your medical condition. The frustrating thing is that it can be very challenging for qualified employees in Hamilton and surrounding areas to get the benefits they deserve. Legitimate claims are denied for many reasons, including errors in paperwork and lack of adequate medical evidence.

At Derek Wilson Personal Injury Law, our team has worked with many employees who have tried to do everything “by the book” but who are denied their benefits.

Derek Wilson founded Derek Wilson Personal Injury Law with one goal in mind: to help people. If you have been wrongfully denied short-term disability or long-term disability benefits, contact Derek Wilson Personal Injury Law for a free consultation with a Hamilton benefits lawyer.

Depending on your situation, this may mean addressing any errors or red flags insurers may have seen in your claim. It can also mean getting more tests or seeing specialists so you can secure more medical evidence and strengthen your claim. Every step of the way, my goal is to pursue the fair benefits you need to rebuild your life.

Contact Us for a Free Consultation

Disability benefits are important resources that help you avoid financial stress when you’re recovering from a medical condition. If your employer offers them, you should be able to take advantage of these benefits when you qualify, and it’s unfair that so many workers in the greater Hamilton area struggle to get this support when they most need it.

Getting a denial doesn’t mean the end of the road. You still have options that can give you the right benefits.

To find out more and to discuss how you can get the benefits you need, contact Derek Wilson Personal Injury Law for a free consultation with a Hamilton disability claims lawyer. Derek Wilson Personal Injury Law understands that in this situation, the last thing you need are additional expenses, which is why your consultation and a review of your situation are free.

Just schedule your free consultation with Derek Wilson Personal Injury Law and bring your denial letter with you when you come to our offices. I will review the letter and explain why your claim was denied—and what you may be able to do about it. I will address your concerns and questions and explain how you might be able to strengthen your claim. 

Knowing the differences between short-term and long-term disability is just the start. If you’re not getting your benefits, reach out to Derek Wilson Personal Injury Law for a free consultation.