Aug 26, 2024 in News Legal News

Legal News: Inflation is Eating into Long-Term Disability Payments: Here's What You Should Do

If you're receiving long-term disability (LTD) payments, you might have noticed that your money doesn't stretch as far as it used to. 

Most LTD plans don't adjust well for inflation, which means even with some cost of living increases, you’re likely feeling financially squeezed. This is especially tough with the high cost of living and soaring rent prices across Canada.

To put it in perspective, consider this: In 2022, 27% of Canadians aged 15 and over—that's 8 million people—reported having at least one disability. That means millions of people are vulnerable to the financial strains caused by stagnant LTD payments amidst rising costs.

Here are some practical tips from our long-term disability lawyers that will help you handle the impact of inflation on your disability benefits.

4 Tips from Long-Term Disability Lawyers to Combat Inflation

1. Examine Your LTD Policy in Detail

Look for clauses that might help shield your benefits from inflation, such as the Cost of Living Adjustment (COLA). COLA clauses are intended to periodically raise your disability benefits to keep pace with inflation, but not every policy includes them.

If you do have a COLA clause in your policy, make sure you understand precisely how it’s calculated and when the adjustments are applied. On the other hand, if your policy doesn’t include COLA, it’s a good idea to reach out to your insurance provider to explore the possibility of modifying your coverage to include this feature.

Be prepared for some resistance from your insurer, even if your policy already includes COLA. Insurance companies are typically motivated to minimize payments. This is where having an experienced long-term disability lawyer can be crucial. They can advocate on your behalf and help ensure that your benefits are adjusted fairly in line with rising costs.

2. Consult with a Long-Term Disability Lawyer

These legal experts understand the complexities of your policy and can significantly aid in making sense of it. 

For example, if there are precedents where your insurer has adjusted benefits for other clients in similar situations, your lawyer can leverage this information to strengthen your case. They'll assist in interpreting policy details and help compile the necessary documentation to support your claim.

Long-term disability lawyers are also adept at negotiating with insurance companies, filing appeals, and exploring other legal options to ensure you receive the benefits you deserve.

3. Look Into Federal and Provincial Programs

Additionally, consider looking into government assistance programs if you're in Ontario. 

Programs like the Ontario Disability Support Program (ODSP) and the Canada Pension Plan Disability offer monthly financial aid that adjusts for inflation, helping to manage essential living costs. These programs, however, have strict eligibility requirements. 

Working with a long-term disability lawyer can improve your chances of successfully navigating the application process and securing the support you need.

4. Don’t Forget Tax Credits and Government Benefits

Both the federal and Ontario provincial governments have a range of financial supports designed to alleviate the economic pressures faced by individuals with disabilities.

One key benefit is the Disability Tax Credit (DTC), a non-refundable tax credit that can significantly reduce the amount of income tax you owe. If you’re eligible, you can apply for the DTC retroactively for up to 10 years, potentially offering substantial tax relief.

In Ontario, there are several additional supports. The Ontario Drug Benefit Program, for instance, helps with the costs of necessary medications. Other benefits include financial aid for home and vehicle modifications, access to assistive devices, and dental care services under ODSP.

Reach Out to a Personal Injury Law Firm in Toronto

Connecting with a leading personal injury law firm in Toronto can be a game-changer when you're dealing with the economic impacts of inflation on your disability benefits.

Our seasoned team of personal injury lawyers in Toronto has a strong history of effectively negotiating with insurance providers. We're committed to protecting your financial future, ensuring your disability payments truly meet your needs.

Schedule a consultation with us today and take a proactive step towards securing your financial stability.