How Severance Pay Affects Long-Term Disability Benefits In Ontario

Losing your job is hard. But losing it while dealing with a long-term disability? That adds a whole new layer of stress. If you're in Ontario and receiving (or applying for)long-term disability benefits, a common question is: "What happens to my LTD payments if I receive severance pay?" The relationship between severance pay and long-term disability can be confusing, especially when both come into play at once.

Severance is meant to support you after job loss, while LTD supports you when a medical condition prevents you from working. At first glance, they seem unrelated. But in reality, the two often interact in unexpected ways that can impact how much you receive — or even whether you remain eligible for one or the other. Understanding these interactions is essential if you want to protect your income and avoid giving up benefits you may be entitled to. Let's explore how to protect your benefits and avoid common mistakes.