Losing Your Job While on Long-Term Disability in Ontario? Here’s What You Need to Know
Losing your job is difficult enough—but losing it while you’re already coping with a long-term disability can be devastating. Many people in Ontario ask: “What happens to my long-term disability benefits if I’m terminated?” The answer depends on your situation, but knowing your rights is the first step.
Maybe you’re already receiving benefits, or perhaps you’re right in the middle of applying. A common, very real fear quickly grabs hold: “Does this mean my disability benefits are gone too?”
The quick answer, surprisingly, is “Not always, but it’s rarely simple.” Here in Ontario, the line between your job ending and what happens to your long-term disability (LTD) benefits can be incredibly blurry. It’s where the rules of your employment intersect, sometimes awkwardly, with your disability insurance policy. My goal in this article is to clear up some of that confusion, so you understand your rights and know exactly what steps to take to protect those vital benefits.
Your LTD Policy: More Than Just a Document, It’s Your Guide
Think of your LTD policy as the ultimate rulebook for your benefits. Most people in Ontario get this coverage through their employer’s group plan. This isn’t just some casual perk; it’s a binding contract. It’s actually between the insurance company and your employer, and you, the employee, are directly named as the beneficiary. This policy lays out every single detail: when you become eligible, how they define “disabled,” how long payments might last, and, crucially for our discussion, what happens if your job comes to an end. If you’re ever trying to figure out what your policy means, speaking with an experienced long term disability lawyer can cut through a lot of that confusion.
Now, a really important piece of advice: get your actual, complete LTD policy. No summaries, no little booklets, no brochures – get the whole thing. Employers often give you simplified versions, but these can leave out key details that become absolutely critical if your employment is terminated. You have a legal right to the full document. Reading it carefully is your very first, non-negotiable step. Pay close attention to sections that talk about “cessation of coverage,” “termination of employment,” or “conversion options.” These are the parts that will explicitly tell you how your benefits are impacted when your job ends.
Timing is Absolutely Key for Your Disability Claim
The moment your disability started, compared to when your employment officially wrapped up, is a big factor. Generally, if you were already approved for and receiving LTD benefits before your job was terminated, your benefits should keep coming. Why? Because your entitlement to that income was already locked in while you were still employed. The insurance company’s obligation to pay you had already been established. Most policies even have a clause that says benefits continue as long as you meet their definition of disability, regardless of your employment status. Even if you’re in this relatively safe spot, it’s still smart to touch base with a long term disability lawyer in Toronto; they can help head off any unexpected administrative headaches.
However, things get much more complicated if your disability claim was still pending, or if your disabling condition actually began after your employment officially ended. If you submitted your claim, but it hadn’t been approved by the time you were let go, the insurer might try to argue your coverage stopped on your very last day of work. This is exactly where the fine print of those policy termination clauses becomes central to your case. Similarly, if you become disabled after your job is over, your group LTD coverage would typically have ceased, meaning you wouldn’t be eligible under that particular plan. For those navigating claims involving conditions like anxiety or depression, be sure to read our blog post: Mental Health & Long-Term Disability: Can You Get Approved for Anxiety or Depression? for more information on the criteria for approval in these cases, paying close attention to when symptoms began in relation to your employment status.
What if You’re Fired While on LTD, or Before You Even Applied?
Imagine this: you’re already out of work on an approved long-term disability leave, and then, out of the blue, your employer fires you. It feels unfair, right? While it might seem strange, your employer often still has obligations regarding your benefits, including LTD, even when you’re not actively at work. As I mentioned, if you were already approved for LTD, those benefits should generally continue. But sometimes, employers make the unlawful choice to terminate someone who is on disability leave. For more in-depth information about your specific rights in this challenging situation, our detailed blog post, ‘Can You Be Fired While on Sick Leave in Canada? Know Your Rights,’ offers further insights.
If you believe you’ve been wrongfully dismissed while on disability, you need to act quickly. Consulting with a lawyer who understands wrongful dismissal cases should be one of your very first steps to understand your legal options. For those whose LTD claim was still in process when the termination hit, or if the firing happened even before you had a chance to file a claim, the path ahead is considerably more challenging. The insurance company might argue that your coverage officially ended on your last day, even if your disabling condition clearly began while you were still on the payroll. In these complex scenarios, the exact wording of your policy, the employer’s stated reason for your termination, and any severance package offered are all incredibly important. Remember, even with a job loss, your right to make a claim for a disability that originated during your employment might still exist. In some cases, you may still be eligible for disability benefits even if your disability arose after the termination of your employment. An experienced employment lawyer in Toronto can help you thoroughly assess your unique situation and fight hard to protect your rights.
Understanding Notice Periods and Severance After a Job Ends
When an employer ends your job here in Ontario, they’re usually obligated to give you reasonable notice before your last day, or, alternatively, pay you money instead of that notice – what we generally call severance. This isn’t just a courtesy; it’s a requirement under both the Employment Standards Act, 2000 (ESA) and what’s known as common law. The length of this notice period, or the amount of severance pay, can be quite significant, especially if you’ve worked for that company for a long time.
Here’s a really critical detail: During this notice period, or for the time covered by your severance pay, your benefits – including LTD – should ideally remain in effect. This is a point many people miss. If your employment is legally considered to continue for benefits purposes throughout that notice period, and your disability starts or is diagnosed during that time, you might still qualify for LTD. However, there’s a big difference between the minimum severance set out by the ESA and the often-longer notice period provided under common law. Employers sometimes try to argue that benefits stop at those ESA minimums. An employment lawyer can help you figure out the appropriate common law notice period for your specific situation and whether your benefits should have continued throughout that entire time. This can be a significant part of a wrongful dismissal claim, potentially including compensation for those lost benefits. If you’re looking for an initial assessment, we offer a free initial consultation about your employment rights that can offer some immediate clarity.
“Just Cause” Termination: A Much Tougher Road
If your employment is terminated for “just cause”, meaning a serious breach of conduct, like theft or gross insubordination or failure to perform employment duties, the legal landscape shifts dramatically. In these situations, many employees are still entitled to notice and severance pay. In rare instances, employers may not be required to provide notice or severance. This can severely impact your ability to claim LTD benefits, as your employment and its associated benefits coverage are typically considered to have ended immediately, or at least that’s what your employer or insurance company would argue. However, if you dispute the “just cause” termination and can successfully show that it was unwarranted or lacked proper grounds, or that the termination overall was unlawful, then your entitlement to benefits during what would have been your notice period could potentially be reinstated. This is exactly where the specialized expertise of a wrongful termination lawyer becomes invaluable. They can skillfully challenge your employer’s claim of just cause and work tirelessly to restore your access to those crucial benefits.
My LTD Claim Was Denied After My Job Ended. Now What?
Even if you were already getting LTD benefits or had a claim in progress, there’s always a chance of a denial or interruption after your job ends. Insurers might argue your disability no longer fits their criteria, or that your job loss somehow invalidates your claim entirely. If your long-term disability claim is denied, it’s incredibly important to remember that you have the right to appeal that decision. This typically involves an internal appeal process with the insurance company first, and then, if that doesn’t work out, potentially moving to legal action. Please, do not simply accept a denial without getting expert advice. A long term disability lawyer in Toronto can guide you through the often-complex appeals process, help you gather and present the necessary medical evidence, and build a strong legal case to challenge the insurer’s decision. They understand the tactics insurance companies sometimes use and can effectively advocate on your behalf.
The financial and emotional toll of a disability can be immense, and adding job loss on top of that only amplifies the burden. Please know that you have fundamental rights, and established legal paths exist to protect your access to vital long-term disability benefits. If you’re an employee proactively planning for job security, be sure to read our blog post, ‘Planning for Job Security in 2025: Tips for Employees with Disabilities,’ as understanding these legal nuances is a vital step toward securing your future.
Your Next Step: Seeking Expert Legal Guidance
Given just how complex these situations can be, seeking expert legal advice is almost always the smartest move if you find yourself terminated from your job while on, or trying to get, long-term disability benefits. An experienced employment lawyer will sit down with you, meticulously review your specific situation, thoroughly analyze your LTD policy, and then give you clear, actionable advice regarding your rights and all your available options. This might involve strategic negotiation with your former employer, aggressively challenging an insurer’s benefits denial, or even pursuing a comprehensive wrongful dismissal claim that includes compensation for your lost benefits.Here at Unified LLP, we have a dedicated team of lawyers specializing in both employment law and long-term disability claims. We genuinely understand the intricacies of how these areas intersect and are committed to helping individuals across Ontario and Alberta navigate these challenging times with confidence and peace of mind. If you’re facing termination while managing a disability, or if your LTD benefits have been impacted by job loss, please don’t hesitate to reach out for a confidential discussion. A compassionate and skilled long term disability lawyer from our firm can provide the clarity, support, and strong advocacy you need during this difficult period. We are pleased to offer a free initial consultation about your employment rights to help you understand your legal standing without any upfront financial commitment. Your financial security and overall well-being are simply too important to leave to chance.
