Short term disability 2024: How to apply | What qualifies

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Alexandre Desoutter updated on 17 May 2024

If you're working in Canada, it's smart to think about what happens if you get sick or hurt and can't work for a while. Sure, there's government help through Employment Insurance (EI), but it might not cover all your needs or last long enough.

That's where short-term disability insurance comes in. It gives you much needed money to help pay your bills and take care of your family when you need it most.

In this article, we show you why having your own short-term disability plan is a good backup, making sure you're covered during tough times. Explore how it works, eligibility, and also compare the best short term disability plans in Canada using our free tool and get free quotes.

Short term disability insurance: Key takeaways

  1. Short-term disability covers up to 6 months of non-working due to illness/injury.
  2. Private STD policies offer up to 85% income replacement, not taxable.
  3. Employer and EI short-term disability benefits are taxable as income.
  4. Medical certification required for all short-term disability claims.
  5. After 6 months, transition to long-term disability may be necessary.

Start exploring complete offers by clicking below:

Insurance company
Coverage
Discover
Our featured offer
Coverage
Up to$120,000per year
With our partner
Our detailed review

The iA Financial Group's Superior Program offers maximum coverage of $120,000 and covers professional classes from 4A to C. With a minimum work time of 21 hours per week, this insurance does not require a minimum pre-tax income. It stands out with non-taxable monthly benefits and a vocational rehabilitation program. Ideal for newcomers, it includes four optional riders and can be renewed up to the age of 70.

Highly recommended
Coverage
Up to$72,000per year
With our partner
Our detailed review

Beneva's Disability Insurance offers a maximum coverage of $72,000 and covers professional classes from 4A to B without requiring a minimum income. Renewable until the age of 65, this plan stands out with its premium refund feature and the possibility of combining with group insurance. It includes four optional riders and does not require a medical questionnaire, offering great flexibility.

Recommended Offer
Coverage
Up to$300,000per year
With our partner
Our detailed review

Canada Life's The Independence Protection Insurance offers maximum coverage of $300,000, one of the highest in the market. It covers professional classes from 4A to B and requires a minimum net income of $35,000 per year. This plan includes 13 optional riders, a partial disability option, and flexible benefit periods of up to 120 months. Non-cancellable until age 65, it is suitable for part-time and seasonal workers without a medical questionnaire.

What is short term disability?

Short-term disability insurance is a policy that pays you when you are unable to work due to sickness or injury. In Canada disabilities related to mobility, pain, mental health and flexibility are the most common causes of inability to earn.

Short-term disability (STD) can either be a private policy or one organized by your employer. An employer-organized STD is provided as a benefit to a job by your employer and typically covers up to 6 months in which you are unable to work due to injury or sickness.

A private STD policy is chosen and paid for by an individual. These policies typically take between 1% and 3% of gross earnings. These policies usually have higher upper limits for payouts and may give you more control over the process of gaining a diagnosis and agreeing on a treatment plan.

It is worth noting that employer-organized short-term disability payouts are recognized as income and taxed as such. In contrast, private short-term disability payouts are not taxed as they are funded by your own contributions.

Good to know

If your employer does not offer short-term disability coverage you may be eligible for EI (employment insurance). This is paid by the Canadian government.

How long is short term disability?

Short-term disability insurance typically covers a period from a few weeks up to 6 months, although some policies may extend up to a year. The exact length of coverage depends on the specific policy terms set by the insurance provider or employer.

For example, if an employee suffers a severe injury that prevents them from working, short-term disability insurance might provide them with a percentage of their regular income (e.g., 60%) starting from the 8th day after the injury and could continue to provide this support for up to 6 months. This financial assistance helps the employee manage their living expenses while they recover and are unable to earn their usual salary.

Good to know

Short-term disability plans can vary between provinces due to different regulations and plan specifics. Coverage details like benefit amounts, duration, and eligibility can differ. For example, short term disability ontario plans might be different from short term disability alberta plans. Both provinces have distinct workers' compensation for work-related conditions, but short-term disability covers non-work-related illnesses or injuries.

How to apply for short term disability?

To apply for short-term disability you will need a medical certificate attesting to your condition from a medical professional.

First of all, you should check if you have coverage through your employer and if so investigate their policy’s duration and rate of compensation.

If you are not covered you may be eligible for EI (employment insurance) which is managed and paid out by the Canadian government. To be eligible for EI you must:

  • Have worked sufficient hours
  • Already used up your allotted sick leave

If you qualify for neither of the above, or you wish to supplement the income from these, you may want to purchase private short-term disability insurance. You can do this through a private broker or online.

Alternatively, you can compare short-disability quotes right here on this website. Simply click the button below and get access to the best disability insurance plans and free personalized quotes.

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How does short term disability work?

Short-term disability pays you a percentage of your normal wage over a period in which you are unable to work.

Freelancers and the self-employed can purchase private short-term disability insurance through an online service or a broker. These policies vary but typically pay between 50% to 67% of your regular salary. Most insurers will require a minimum number of hours worked per week, typically around 20 hours. You will require a medical certificate from a medical professional to certify your inability to work.

EI short-term disability is funded by employment taxes and paid out by the government. It can last up to 15 weeks and pay 55% of previous earnings, up to a limit of $2,380 per month. It is not possible to receive EI benefits if you are receiving short-term disability from either an employer or a private scheme.

Employer-offered short-term insurance can last up to 24 weeks and will pay between 40% and 60% of your normal salary. You will usually be required to undergo an independent medical examination (IME) by a doctor of either your employer's or the insurance provider's choosing.

After 6 months, if you are still unable to return to work then you will need to look at transitioning to long-term disability.

What is the difference between short-term and long-term disability?

Short-term disability typically covers temporary conditions with an expectation that you will return to work.

Long-term disability insurance begins when short-term insurance or EI benefits end. It typically covers permanent disabilities, that is injuries or illnesses that will continue to affect your ability to work.

Long-term disability will usually distinguish between whether you can return to the job you had previously and whether you can work any job. For example, a loss of mobility might prevent a return to a physically strenuous job environment but not a sedentary desk job.

Types of disabilityNature of disabilityDuration of disabilityDistinguish between ability to do your job and any job?Provided by
Short-term disability
temporaryUp to 6 months Private or through an employer
Long-term disability
permanentAfter 6 months Private or through government pension plan (CPP or QPP)
Short-term disability vs long-term disability

What qualifies for short-term disability?

The definition of a disability can vary in-between different insurance companies and even between different policies in the same company. Your symptoms, their severity, and how they prevent you from working are more important in qualifying for short-term disability than the specificity of your condition.

However, a diagnosis allows a doctor to create a treatment plan for you. Insurers prefer to have a clear diagnosis and treatment plan and may stop payments or even deny your claim if they do not see an attempt to change your condition.

Expert advice

The most common claims to be denied are burn-out, pregnancy and stress. However, this is where disability lawyers can help you. They can help provide invaluable advice, help you navigate the claim process and get all the documentation you need to overturn a negative claim decision. Read our full guide on Disability Lawyers in Canada.

Burn-out and stress are vaguely defined conditions that will require a strong diagnosis in support of an approved claim. By contrast, depression and anxiety are nationally recognized as disabilities and have clear definitions and treatment plans.

Pregnancy is not defined as a disability however there may be complications that make your job impossible.

Here are some common conditions that may qualify for short-term disability:

  • Anxiety
  • Back Problems
  • Bipolar Mood Disorder
  • Carpal Tunnel Syndrome
  • Chronic Fatigue Syndrome
  • Chronic Pain
  • Complex Regional Pain Syndrome
  • Crohn’s Disease
  • Depression
  • Fibromyalgia
  • Heart Disease
  • Headache and Migraine
  • Irritable Bowel Syndrome (IBS)
  • Knee Disorders
  • Lupus
  • Lyme Disease
  • Multiple Sclerosis
  • Neck and Cervical Disorders
  • Psoriatic Arthritis
  • Sleep Disorders
  • Vestibular Disorders
  • Visual Disorders

Now that you know what short term disability is and how it works, let's take a quick look at the best short term disability insurance plans in the market.

What is the best short term disability in Canada?

Here is a roundup of the best short term disability plans in Canada.

Insurance PlanTarget AudienceKey FeaturesCoverage and Benefits
iA Superior Program
Self-employed, business owners
  • Up to $10,000 monthly benefit
  • Nontaxable
  • Rehabilitation services
  • Premium waiver
  • Coverage during unemployment
  • Benefits for organ donation and death
Canada Life Independence Plan
Non-traditional employment, limited access to employer coverage
  • Renewable
  • Various waiting/benefit periods
  • Total/partial disability benefits
  • $500 to $3,000 monthly benefits
  • Special provisions like hospitalization waiver
Beneva
Broad range of occupational classes
  • Up to $72,000 per year
  • Combines with group insurance
  • Premium refunds
  • Renewable to age 65
  • Total or partial disability coverage
Humania Income Insurance - Accident and Sickness
Wide range including part-time workers, students, and retirees
  • Offers up to $10,000 monthly for total or partial disability
  • Choice of benefit periods, and waiting periods
  • Premiums guaranteed for the first 5 years
  • A monthly benefit of up to $10,000 for total or partial disability, with a choice of benefit period up to 65 years
  • Waiting periods of 14, 30, 90, or 120 days
  • Up to $1,000 per month for less traditional working scenarios
RBC Professional Series®
High-income professionals
  • Comprehensive benefits for total/partial disability
  • Non-cancellable, recovery benefit
  • Up to age 65 coverage
  • Healthcare profession rider
  • Retirement protector
Manulife Personal Accident Disability Insurance (Manulife short term disability)
Wide audience including unemployed and retirees
  • Accident and partial disability benefits
  • Hospitalization, and rehabilitation benefits
  • Up to $6,000 monthly
  • Customizable benefit periods and add-ons
RBC Quantum®
High-income earners (doctors, lawyers, etc.)
  • Income protection for partial loss
  • Return to work assistance
  • Benefit integration
  • Benefits till age 65
  • Various premium options
  • Family care and retirement riders
Humania Assurance - Accident
Those in employment (including self-employed and seasonal workers) and those not traditionally employed (students, homemakers, unemployed, retirees)
  • Simplified application with just one health question
  • No financial documentation required for coverage
  • Competitive pricing
  • Coverage options include a monthly benefit of up to $6,000
  • Choices of waiting periods and benefit periods for customization.
  • Special conditions adjust benefits and definitions based on age and employment status after 70 or if unemployed for more than 90 days.
RBC Bridge Series®
Small business owners, middle-income earners
  • Total disability benefits
  • Return to work assistance
  • Renewable till age 65
  • Level premiums
  • Compassionate care
  • Occupation extension benefits
RBC The Foundation Series™ Policy
Small business owners, managers, tradespeople, farmers, middle-income earners
  • Total disability benefits
  • Flexible benefit periods
  • Return to work assistance
  • Non-cancellable to age 65
  • Medical Confidence™ service
  • Long-term care conversion option
  • Specified monthly benefits for total disability with options for two years, five years, 10 years, or until age 65.
  • Survivor benefits and integration of benefits with auto insurance.
  • Various elimination periods offered.
iA Acci-Jet Program
Manual laborers, high-risk jobs
  • Up to $6,000 monthly
  • No medical exam
  • Premium waiver
  • Recurrent disability benefits
  • Coverage extension to age 75
Best short term disability in Canada

These apart, there are also notable plans like Sun life short term disability insurance and blue cross short term disability. You can read our full review here: Sun Life disability insurance and Blue Cross disability insurance.

How much does short-term disability pay?

Short-term disability is calculated as a percentage of your previous earnings. Private short-term disabilities typically have the highest upper limits on payouts. Compensation can go as high as $24,000 a month.

EI benefits pay 55% of previous earnings, up to a limit of $638 per week. Meanwhile, employer-offered plans will vary in compensation from company to company. However, typically compensation will range between 40% and 70% of your previous earnings. Upper limits again will vary.

If you want to get short term disability insurance based on your unique needs, you can do it right here. Use our free tool below to explore coverage limits of the best plans in Canada and get free quotes.

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Who pays for short-term disability?

EI is paid for by your taxes, it is distributed by the Canadian government. Meanwhile, self-funded private disability insurance is paid for by your contributions.

Employer-organized short-term disability insurance falls into two subdivisions, group insurance plans, employer-funded plans

Group insurance plans

When jobs provide group coverage for employees, covering dental and medical, short-term disability will often be included. These plans are run by an insurance company, which will be in charge of judging claims and paying out. Read our complete guide on group disability insurance plans.

Employer-funded plans

This type of short-term disability is organized directly by your employer. That means that your employer will be in charge of judging your claim and deciding the payout. They will also be more directly involved with your treatment plan.

Is short term disability taxable?

This depends on the type of disability insurance you have.

STD insurance providerWho pays STD benefits?Is the STD income taxable?
Employment insurance
Canadian government
Private STD insurance
Insurance company
Group insurance plan
Insurance company
Employer-funded plan
Your employer
Taxable disability income

If you want non-taxable, secure disability protection that is not reliant on your employer's cooperation, you can use our comparison tool to find the best deal to protect yourself and your income now. Explore multiple plans, compare coverage, and get free short term disability insurance quotes by clicking the button below.

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What are the FAQs on short term disability insurance in Canada?

Is there mental health short term disability coverage?

Yes, short-term disability insurance typically includes provisions for mental health issues, providing financial assistance to individuals who are unable to work because of mental or psychiatric disorders like anxiety, depression, or stress.

The availability and extent of coverage for mental health conditions depend on the specific policy's guidelines, including necessary documentation from medical professionals and any applicable waiting periods.

What to do if short-term disability denied?

If your short-term disability claim is denied, review the denial letter and gather supporting documentation. Submit a detailed written appeal to the insurance company, adhering to their guidelines. Consider consulting a disability lawyer for guidance. If the appeal fails, contact your province's insurance regulator or explore alternative financial assistance options.

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Alexandre Desoutter
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Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.