In Ontario, many people receiving long-term disability (LTD) benefits are allowed to work in limited ways, often through partial disability benefits or an insurer approved gradual return to work plan. This is usually permitted only if they still meet the policy definition of disability and report all earnings. Work income can reduce LTD payments, and other programs such as Employment Insurance (EI) sickness benefits and Canada Pension Plan Disability (CPP-D) have strict reporting rules and earnings thresholds.
That said, I’ve seen many situations where confusing policy wording or simple mistakes cause hard working employees to lose out on disability benefits they should receive. My work focuses on helping injured people protect and pursue the benefits they are entitled to.
Can You Work While on Long-Term Disability in Ontario?
Yes, in some cases you can work while receiving LTD benefits, but the rules depend on your specific insurance policy, and any work you perform can affect your payments. It is important to understand your policy before taking on any work, even part time or casual work, while you are injured or ill.
Some policies are structured to make it easier to work while receiving disability benefits. For example, some Ontario LTD policies recognize that disability is not always all or nothing and allow for partial disability benefits. You may be able to work part time if your medical condition prevents you from working full time and the insurer accepts that you are partially disabled under the policy.
Keep in mind that many LTD policies use two main disability definitions. In an “own occupation” definition, you are considered disabled if you cannot complete the essential duties of your own job. In an “any occupation” definition, you are considered disabled if you cannot perform the duties of any job for which you are reasonably qualified by education, training, or experience.
In general, an own occupation definition is more flexible and may allow some work while you continue to qualify for benefits. However, once you start earning above a specific threshold, which may be outlined in the policy, your benefits may be reduced or terminated.
A disability policy may also contain rehabilitation incentives intended to encourage a safe return to work. These benefits may allow you to seek training, professional development, or job search assistance so you can pursue a job that you can perform even with a long term injury or illness.
Working without approval, failing to report income, or exceeding policy thresholds can lead to reductions in benefits or termination of your claim.
What Counts as “Working” for LTD Purposes in Ontario?
For LTD insurers, working is broader than many people expect. It can include paid employment, contract work, self employment, consulting, or income from a family business. In some cases, volunteering or schooling can also raise questions if what you are doing appears inconsistent with the limitations you have reported. For example, if you volunteer or attend school and perform tasks similar to those you performed at work, your insurer may question the extent of your disability.
If you are asking whether you can work while on disability, the next question should be what your LTD policy says and what your insurer has formally approved.
Can You Work Part-Time While on LTD and Keep Benefits?
Often the answer is yes, but only if the work clearly aligns with your medical restrictions and the terms of your policy. Many claimants in Hamilton, Ancaster, Burlington, and Stoney Creek return on a reduced schedule or with modified duties while receiving partial disability benefits in Ontario.
In many policies, earnings are offset against benefits. That means your LTD payment is reduced rather than eliminated, as long as your earnings stay within the thresholds described in the policy and the work stays within your medical restrictions.
How Earnings Affect LTD Benefits
Any income you earn while on LTD usually reduces your benefit amount through what the policy calls a contractual offset, meaning your LTD payment is reduced based on how much you earn from work. The policy wording sets out which types of income are counted and how the offset is calculated.
Some forms of income may be fully deductible, while others may be partially deductible or excluded. The rules are technical, and small differences in policy language can have a large impact on your net benefit.
How Much Can You Earn While on LTD Before Benefits Are Reduced?
There is no universal dollar amount. Instead, insurers apply a formula set out in your policy. Some policies reduce benefits dollar for dollar after a certain threshold. Others allow you to earn a percentage of your pre disability income before reductions apply.
The following examples show how different earnings situations might affect your LTD benefits:
| Earnings scenario | Likely impact on LTD benefits |
| No earnings | Full LTD benefit continues |
| Minimal part time income | Partial reduction under offset clause |
| Approved rehabilitation income | Benefits often continue with closer review |
| Unreported income | Risk of suspension, denial, or allegations |
| Earnings near pre disability income | Possible termination of LTD entitlement |
Always review your policy carefully before taking on work or continuing to work after an injury or illness. You must report all income to your LTD insurer. Failure to report even small amounts can be treated as misrepresentation. Insurers often verify income through tax records, employer confirmations, and surveillance.
This is especially important because many Ontarians work multiple jobs, have side businesses, or pursue passion projects. If you receive LTD benefits because you are injured at your main job but continue to be paid for a passion project such as art or photography, the insurer will generally treat that as income and may move to reduce or terminate your benefits.
Returning to Work Safely: Rehab and Gradual Return to Work Programs
A structured, insurer approved return to work is usually the safest way to attempt work while protecting your LTD claim. This approach is often called a gradual return to work program or a rehabilitation plan under LTD.
When these programs are used properly, they can help you test your capacity, adjust duties, and protect your position if symptoms worsen.
What Is a Rehabilitation or a Gradual Return to Work Plan?
A rehabilitation plan is a temporary, monitored arrangement that allows you to test your work capacity while remaining medically supported. It often includes reduced hours, modified duties, and regular medical reporting. Insurers may help coordinate this plan and monitor progress. In many cases, this structure allows you to continue to receive some benefits while you gradually build up your ability to re enter the workforce.
For people considering a return to work while on LTD, a rehabilitation plan can provide protection if symptoms worsen or work proves unsustainable. It also shows the insurer and the court that you are making a good faith effort to recover and to return to work where possible.
How to Plan a Trial Return to Work
Planning is critical before you attempt any return to work, especially when you are receiving LTD benefits. A careful approach reduces the risk that the insurer will later argue that you no longer meet the disability definition. Consider the following steps:
- Physician support. Confirm that your physician supports the attempt to return to work and documents your functional limitations in the medical record.
- Insurer notice. Notify the insurer in writing before starting work. Review your policy to understand how and when you must inform the insurer and what needs to be disclosed.
- Employer communication. Discuss your needs and restrictions with your employer so there is an opportunity to modify job duties, adjust hours, or provide accommodations.
- Job duties and restrictions. Ensure that the specific job duties you will perform match your documented medical restrictions, including physical, cognitive, and emotional demands.
- Ongoing treatment. Keep your medical treatment consistent and attend all required appointments to demonstrate that you are serious about treatment and to secure up to date documentation about your condition.
Tracking and records. Track symptoms, hours, and earnings carefully and submit updates to the insurer as required, including any changes in duties or schedule.
This level of planning and documentation reduces the risk of disputes later and can help protect your LTD benefits if the return to work is not successful.
How Working Interacts with EI Sickness, CPP Disability, and Other Benefits
LTD benefits rarely exist in isolation. Many Ontario claimants also receive or have received Employment Insurance sickness benefits or Canada Pension Plan Disability, each with its own rules about working while on benefits. Some people also receive support through the Ontario Disability Support Program (ODSP) or the new federal Canada Disability Benefit.
The rules and financial thresholds for these programs change from time to time, so it is important to rely on current information when making decisions about work.
How Do EI Sickness Rules Apply if You Take a Few Shifts?
Under Employment Insurance sickness rules, working while on claim is not prohibited, but you must report all earnings and all work performed in the week it is performed, even if you earn very little. The rules allow limited work, but benefits are reduced based on income earned.
Failure to report work accurately can result in overpayment, penalties, and a requirement to repay some of the benefits you received. If you are considering taking a few shifts while on EI sickness benefits, it is important to keep careful records and use the government reporting tools correctly so that your EI record stays accurate.
How Much Can You Earn on CPP-D Before Benefits Are at Risk?
Working while receiving CPP disability benefits is allowed in some circumstances, but the Canada Pension Plan sets annual earnings markers and may treat higher earnings as evidence that you are capable of substantially gainful employment.
For example, in a given year beneficiaries must notify Service Canada if earnings exceed a set annual amount, and benefits may stop if earnings reach a higher level that is considered substantially gainful employment. These thresholds are adjusted periodically and must be monitored carefully.
Income from work while receiving CPP-D may also affect your LTD benefits, because many LTD policies require you to apply for CPP-D and then offset CPP-D payments against LTD payments.
Both ODSP and the Canada Disability Benefit require you to report income and additional benefits you receive. Your disability payments may be reduced if you have other sources of income, and failing to report can trigger overpayments and compliance issues.
Documentation and Reporting: What Insurers Expect While You Work
Once you begin working, insurers expect consistent medical and financial documentation. Guidance from the Financial Consumer Agency of Canada reinforces the importance of understanding and complying with your disability insurance obligations.
Insurers want to see that the work you are doing is consistent with your reported limitations and that earnings are fully disclosed so offsets can be applied correctly.
What Documents Should You Send Your Insurer When You Start Working?
When you return to work in any capacity while on LTD, insurers commonly request several types of documents.
- Medical reports. Updated medical reports and, in many cases, an Attending Physician Statement or functional abilities assessment that describes your diagnosis, limitations, and restrictions.
- Earnings information. Pay stubs or other records that show your hours, wages, and any bonuses or commissions.
- Job duties and accommodations. Job descriptions, letters from your employer, and confirmation of any workplace accommodations or modified duties.
Your insurer and policy will outline how to submit these documents and how often they are needed. Pay close attention to timelines and requirements, and keep copies of everything you send. Late or inconsistent reporting often leads to delays, interruptions of benefits, or deeper reviews.
If your work capacity is disputed, an insurer may request an Independent Medical Examination to reassess your limitations. Receiving notice of an Independent Medical Examination does not automatically mean your benefits will be cut off, but it is a sign that the insurer has concerns and is reviewing your claim more closely. This is often a point at which legal advice can be valuable.
Common Pitfalls and When to Get Legal Help
Many LTD denials related to work are preventable, but once benefits are cut off or reduced, disputes can become complex.
One common issue is unreported income, even from short term or informal work. Another frequent problem is the change from an own occupation to an any occupation definition after approximately 24 months. At that point, many policies allow insurers to reassess whether you can perform other work, and some insurers use this change to stop LTD payments if they believe you can take on a different job.
Social media activity can also harm your benefits. If posts suggest that you are working, travelling extensively, or engaging in activities that appear inconsistent with your claimed limitations, insurers may use those images or comments to challenge your disability.
Failed trial return to work efforts, disputes about offsets or earnings thresholds, and disagreements over whether modified work is truly suitable are also common reasons for LTD disputes.
If your benefits have been reduced, suspended, or terminated, consulting with a disability lawyer can help. While an accident benefits lawyer can help with claims after a car accident, a disability lawyer focuses on LTD disputes and has the experience and insurance knowledge to address denied or disrupted disability benefits.
When Should You Talk to a Hamilton Disability Lawyer About an LTD Denial?
If your insurer questions your work capacity, applies unexpected offsets, or stops benefits after you attempt a return to work, you should consult with a Hamilton based long term disability lawyer, who can explain your options and help you pursue the benefits you may be entitled to. Working while on LTD in Ontario is possible, but it must be done carefully. Before accepting shifts or returning to work, confirm your policy rules, involve your doctor, and notify the insurer in writing. Coordination between LTD, EI sickness benefits, CPP-D, and other income sources is essential to avoid overpayments or denials.
If your insurer challenges your claim or penalizes you for attempting to work, I would be pleased to review your situation and discuss potential next steps. I started my law firm, Derek Wilson Injury and Disability Law, because I saw too many injured Ontarians in Hamilton, Burlington, Dundas, and surrounding areas being denied the disability benefits they depended on or being pressured back to work too soon. As a long term and short term disability lawyer, I help clients seek the benefits they are entitled to under their policies. Contact my firm today to arrange a free consultation. We can discuss working while on LTD, benefit offsets, or a denied disability claim so that you understand what your options may be and how to move forward safely.