Can Long-Term Disability Deduct Non-Earner Benefits?

Yes. In Hamblin v. Standard Life Assurance Co. (2016 ONCA 854), the Ontario Court of Appeal upheld that Standard Life could deduct Non-Earner Benefits (NEBs) from the plaintiff’s LTD payments because the LTD policy explicitly allowed deductions for “any disability benefit payable under a provincial auto insurance law.” Although the plaintiff’s auto insurer had the right to deduct LTD payments from the NEB but failed to do so, Standard Life exercised its contractual right to reduce LTD benefits accordingly. The court ruled that NEBs qualify as a disability benefit under the policy and that contract terms, rather than statutory “apples-to-apples” rules, determined deductibility. Thus, Standard Life was entitled to make the deduction.