Short Term Disability Benefits in Canada

Short-term disability benefits offer essential financial support to Canadian workers facing temporary health challenges. As part of a group disability insurance plan, it plays a crucial role in helping workers manage their finances during recovery.

This article will examine key features of short term disability insurance in Canada, including eligibility requirements, benefit amounts and duration, plan integration with Employment Insurance sickness benefits, and more.

What is Short Term Disability?

Short term disability insurance provides income replacement for a limited time if you become unable to work due to a non-work-related illness or injury. It helps protect your finances by paying a portion of your salary if you can’t work.

There are three main types of STD plans available in Canada:

Employer-Paid Plans

Many companies offer short-term disability insurance coverage to their employees, either through:

• Self-Funded Plans: The employer directly funds the STD benefits using their finances without the involvement of an insurance company.
• Insured Plans: The employer partners with a private disability insurance company to provide STD coverage. Premiums are paid by the employer and/or employees.

According to Statistics Canada, over 6 million Canadian workers have access to employer-sponsored STD benefits. The prevalence is highest among public sector, finance, insurance, and educational services employees.

The main advantage of employer-paid STD plans is that they are available simply through your job without having to purchase individual disability insurance. 

Employer plans typically integrate well with sick leave and other company policies around medical leave. The income replacement amounts may also be higher than government plans.

Government Sponsored Programs

If the employer does not provide short-term disability coverage, you might be eligible for benefits through government-funded programs, including:

Employment Insurance (EI) Sickness Benefits

EI sickness benefits are available to eligible Canadian employees who have paid EI premiums in the last 52 weeks and are unable to work for medical reasons. As of 2025, the benefits cover 55% of your average insurable income, with a weekly maximum of $695.

You can receive EI sickness benefits for a maximum of 26 weeks in most provinces. EI sickness benefits can function as STD insurance if you lack coverage through your employer. (Source)

Canada Pension Plan (CPP) Disability Benefits

While not specifically an STD program, the CPP disability benefit can provide income replacement if you contributed to CPP long enough during your career and meet their definition of disability.

The CPP disability benefit pays out a monthly amount based on your retirement pension, along with additional benefits for you and your dependents. There is no maximum benefit period as long as you remain disabled under CPP criteria.

Private Disability Insurance

If you do not have access to any STD coverage through work or government programs, privately purchased disability insurance is highly recommended. Individual STD insurance policies are available from most major Canadian insurance companies.

Private STD plans offer benefits comparable to group employer plans, often with higher income replacement amounts and additional services. 

The premiums and policy costs are paid independently by the insured individual. Those without employer STD coverage should strongly consider arranging private STD insurance.

Key Points About Short Term Disability

Short term disability insurance provides crucial financial protection if health issues prevent you from working. It helps you focus on recovery without worrying about bills.

• It replaces part of your income, usually 50-70% of your salary, for a defined period if you can’t work due to illness or injury.
• The maximum benefit period is usually 3-6 months.
• It does not cover work-related injuries covered by workers’ compensation.
• Most policies have an elimination period, such as 7 or 14 days before benefits start.
• Premiums are typically low cost, often less than 1% of salary.
• It can be purchased through an employer or individually. Group coverage is cheaper than individual policies.
• Pre-existing conditions may be excluded for 12 months.

Source: Short Term Disability and Long Term Disability Benefits – ltdlawyerontario.com

How Long Does Short Term Disability Last?

The maximum short term disability benefit period is typically 3-6 months. This provides income replacement during the initial weeks and months of disability, allowing time to recover or transition onto long term disability benefits.

Short Term Disability Policy Duration

Short term disability policies specify the maximum length of time you can receive benefits. Common durations include:

• 3 months: A 3 month STD policy is the shortest option. It provides 12-13 weeks of benefits.
• 6 months: A 6 month STD policy is the most common duration, giving 26 weeks of coverage.
• 12 months: Some group STD plans through employers offer up to 12 months of benefits. This is less common than 3 or 6 months.
• Custom duration: Some insurers allow you to choose a custom benefit period, such as 9 months on individual policies.

The needs of your occupation and income requirements will determine the ideal policy length. A shorter 3 month period has lower premiums, while a longer 6 month plan provides more financial protection.

Short Term Disability Claim Duration

The duration of your individual disability claim depends on your recovery timeline. Benefits continue until the earliest of:

• You recover and return to work
• You reach your policy’s maximum benefit period
• You begin receiving long term disability benefits
• You pass away

So, while STD policies provide 3-6 months of coverage, your actual claim may be shorter based on your recovery and RTW timeline.

What Conditions Qualify for Short-Term Disability?

To qualify for short-term disability benefits, you need to show that your condition prevents you from carrying out the essential tasks of your job. 

Both physical and mental health issues may be eligible, provided they are backed by clear medical documentation and genuinely limit your ability to work.

Six common conditions that may qualify you for STD benefits include:

• Injuries from accidents, falls, and fractures.
  • Broken bones
  • Severe sprains
  • Joint damage
  • Back injuries
  • Neck injuries
  • Concussions
• Illnesses
  • Cancer
  • Respiratory illnesses
  • Digestive disorders
  • Cardiac conditions
  • Neurological disorders
  • Strokes
• High-risk pregnancies with complications
  • Bed rest
  • Preeclampsia
  • Complications after childbirth
• Surgeries requiring extended recovery periods
  • Outpatient procedures
  • Inpatient surgery and recovery
• Chronic condition
  • Multiple sclerosis
  • Fibromyalgia
  • Arthritis
• Mental illnesses
  • Clinical depression
  • Anxiety disorders
  • Bipolar disorder

STD insurers evaluate how your condition impacts your ability to perform your normal work duties. Supporting medical evidence is required to confirm your group disability insurance.

How to Apply for Short Term Disability

Applying for short term disability benefits involves contacting your insurer, submitting claim forms, and providing medical documentation. Here is the typical STD claim process:

Notify Your Employer

• Inform your manager and HR department that you must take disability leave due to illness, injury or pregnancy.
• Ask about the process, requirements and forms to submit an STD claim.

Contact Your Insurer

• Call your STD insurance carrier to begin a claim. Provide details on your condition and work absence.
• Ask what documents, claim forms, and medical evidence you must submit.

Complete Claim Forms

• Obtain STD claim forms from your employer or insurer. Forms confirm your inability to work and duration.
• Forms may include an Attending Physician Statement detailing your condition, treatment, and limitations.

Submit Medical Evidence

• Provide medical records, test results, and documentation of your illness, injury or pregnancy complications.
• An insurer may request that you undergo an independent medical exam by their doctor.

Claim Decision

• The insurer will evaluate your documentation and make a claim determination.
• If approved, STD checks or direct deposits will begin after the elimination period.

Work closely with your doctors and insurer to ensure proper STD claim submission. Call your insurer if you have any questions during the process.

How Much Does Short Term Disability Pay?

Short term disability policies pay a percentage of your gross salary, typically 50-70%. The maximum weekly benefit is based on your earnings.

Income Replacement Percentage

• Most STD plans pay 60% of your gross weekly earnings
• 50% of salary is generally the minimum replacement percentage
• 70% is sometimes offered on group STD plans, but it is less common

Maximum Weekly Benefit

• The maximum benefit is a percentage of your salary, often 60%
• STD payments are capped at a weekly maximum amount
• Higher incomes can purchase increased coverage on individual policies

The benefit amount aims to provide sufficient income to cover bills without being an increase in take home pay. Taxes are deducted from payments.

How to Get Short-Term Disability Approved for Anxiety and Depression

It can be challenging to get short term disability benefits approved for mental health conditions like anxiety, depression and stress. Here are 5 tips for getting your STD claim approved:

See a Specialist

Seeing a psychiatrist or psychologist lends credibility to a general practitioner. Specialists have expertise in diagnosing and treating mental disorders.

Document Severity

Provide evidence of severe symptoms and impairment. Include test results, mental status exams, and clinical observations demonstrating an inability to work.

List Functional Limitations

Explain how anxiety or depression symptoms prevent you from performing your job duties. Detail how cognitive deficits and anxiety attacks impact work.

Show Ongoing Treatment

Insurers want to see you are actively treating your condition with psychotherapy, medications or other modalities. Gaps in care raise suspicion.

Avoid Activities

Refrain from social media posts and activities indicating you can work. Focus on treatment and limit social interactions until your claim is approved.

Supporting documentation and compliance with treatment demonstrate you are genuinely disabled from a mental health standpoint. Be thorough and detailed when submitting your claim.

How to Claim Short Term Disability Benefits

Claiming short-term disability benefits involves prompt notification and submission of the required claim forms. Here are the key steps in filing a successful STD claim:

Notify Your Employer

• Alert your supervisor and HR about needing disability leave for illness, injury or surgery.
• Ask about claim forms, procedures and return to work policy.

Contact Insurer Within 48 Hours

• Report your claim to the STD carrier within 1-2 days of becoming disabled.
• Provide details on your condition, work limitations and projected absence duration.

Obtain Claim Forms

• Acquire claim forms from employer or insurer. Forms authorize the release of medical records.
• Forms include an Attending Physician Statement to be completed by your doctor.

Submit Medical Documentation

• Send supporting medical records, test results, chiropractic and physical therapy notes.
• An independent medical evaluation may be required by insurer.

Return Completed Forms Promptly

• Sign and return claim forms to insurer within 10 days to avoid delays.
• Clarify the next steps and timeline for the claim decision.

Who Pays for Short Term Disability?

There are two main short term disability insurance options – employer-paid group plans and individual policies paid by employees.

Employer-Paid Group STD

Many companies provide STD insurance as an employee benefit in Canada. The employer pays the full premium cost. Group STD benefits are guaranteed issue in most cases without medical underwriting.

Group STD plans have the advantages of lower rates and not requiring health questions. A significant downside is loss of coverage if you leave your job.

Employee-Paid Individual STD

Purchasing individual short term disability insurance means you pay the premiums personally. Rates are higher than group plans but coverage continues if you change jobs.

Individual STD policies require medical underwriting. Pre-existing conditions may be excluded for 12 months. Portable individual plans provide ownership of your policy.

Some group STD plans are contributory, meaning employers and employees share the premium cost. Disability insurance gives crucial income protection that employees greatly value.

The bottom line

Short-term disability benefits in Canada play a vital role in supporting individuals who are temporarily unable to work due to illness or injury. These benefits, available through private or public programs, help ensure financial stability during recovery and reduce the stress of lost income.

To receive timely support, applicants should be aware of the eligibility requirements, prepare accurate documentation, and follow the correct application process. Delays or errors can affect benefit approval and payment timelines.

Beyond income replacement, these benefits reflect a broader commitment to employee health and well-being, helping individuals recover with greater peace of mind and return to work when ready.

Frequently Asked Questions about Short Term disability Insurance in Canada