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What is a Rehabilitation Program and how does it work?Under the DI plan, a Rehabilitation Program has been designed to help ease you back to work after being on DI or temporarily allow other employment opportunities when, due to a medical condition, an employee cannot perform all of the duties of his or her own position. In this Program, you may return to work on a reduced number of hours each week to eventually return back to your normal hours of work. For example, an employee may work 2 days a week for a number of months, and gradually increase the number of days worked until normal working hours are resumed. Under the DI plan, a Rehabilitation Program must be approved in writing by Sun Life, the insurer of the DI Plan, and must be supported by medical evidence provided by your treating physician. If you return to work on the Rehabilitation Program, you will be paid for the number of hours you work based on the classification and level of the job you are doing. This income, plus paid statutory holidays, vacation, sick leave, extra-duty compensation including compensatory leave granted, allowances paid (e.g. bilingual bonus) are considered to be your Rehabilitation Earnings. How do my Rehabilitation Earnings affect my DI benefits?Under the Rehabilitation Program, you can receive up to 100% of your Insured Salary, even though Sun Life will provide you with benefits up to 70% of your insured salary. In other words, you will receive your Rehabilitation Earnings from your Department over and above your DI benefit. Your Department will report your gross Rehabilitation Earnings to Sun Life on a monthly basis and the insurer will compare your gross Rehabilitation Earnings to your Monthly Insured Salary. Your Rehabilitation Earnings will not affect your monthly DI benefit unless your total income exceeds 100% of your Insured Salary, at which time, Sun Life will reduce your DI benefits to ensure that your total monthly income does not exceed 100% of your Insured Salary. When an employee participates in a Rehabilitation Program, the monthly DI benefit payable is calculated as follows: Insured Salary (A) minus Rehabilitation Earnings (B) = DI benefit payable (C), 70% or less of insured salary.
In the first month, the DI benefit of $1,750, plus Rehabilitation Earnings of $500, equals $2,250 or 90% of the Insured Earnings. In month 2, Rehabilitation earnings increased to $1000, so the DI benefit was reduced to ensure that the combined monthly income did not exceed the Insured Salary of $2,500 per month. Please note that the Rehabilitation Earnings were calculated by dividing the monthly income by 4 to obtain a weekly amount, which was then divided by 5 to arrive at a daily income. These calculations are simplified for the purpose of these examples only, and are not intended for any other use. What happens if my salary increases retroactively?If a retroactive salary increase for your position, for example due to a re-negotiated collective agreement, is effective prior to the date your DI benefits became effective, both your Insured Salary and your DI benefit will be re-calculated accordingly.
DI benefits started July 1st at $1,750/month, based on an Insured Salary of $30,000. A collective agreement signed December 15th increases that salary to $32,000 retroactive to March 1st of that same year, which is prior to the date the employee started to receive benefits.
In this example, the DI benefits will be increased by $116 per month retroactive to July 1st. It is important to know that if the salary increase were effective on or after the day your DI benefits became effective, in this example on or after July 1st, neither the Insured Salary nor the DI benefit would change. Will a retroactive salary increase affect my Rehabilitation Earnings?A retroactive salary increase may affect your Rehabilitation Earnings, which are paid based on the salary for the classification and level of the job you are performing while on the Rehabilitation Program. Your Department will report to Sun Life any additional Rehabilitation Earnings paid to you retroactively. EXAMPLE: DI benefits started July 1st and employee returns to work August 1st, 2 days/week. Rehabilitation Earnings equal $1000/month, based on a salary of $30,000. A collective agreement is signed December 15th increasing the salary of the claimant's position while on the Rehabilitation Program to $32,000 retroactive to March 1st of that same year.
Will a retroactive increase in Rehabilitation Earnings create a DI overpayment?If your Rehabilitation Earnings increase retroactively, Sun Life may have to reduce your DI benefit retroactively so that your total monthly income does not exceed 100% of your Insured Salary during the retroactive period. However, since the Insured Salary almost always increases as a result of a retroactive salary increase, overpayments of DI benefits rarely occur. Example: insured salary does increase The following example shows the effect on DI benefits and Rehabilitation Earnings when Insured Salary is increased retroactively. In the example, DI benefits start July 1st; Insured Salary increases retroactively on March 1st to $32,000 and Rehabilitation Earnings starts August 1st. Remember, under a Rehabilitation Program, you can earn up to 100% of your Insured Salary.
Example: insured salary does not increase A retroactive increase to Rehabilitation Earnings with no corresponding increase to Insured Salary will create a DI overpayment. If the Insured Salary in the previous example had remained at $2,500 because the effective date of the salary increase was, for example, August 1st and not March 1st, which is after the date DI benefits started (July 1st), an overpayment would be created.
This is a result of increased Rehabilitation Earnings payable for employment after the date the new salary increase became effective. As shown above, the DI benefit would be retroactively reduced by $66 per month (from $1500 to $1434) to take into account the increased Rehabilitation Earnings. As a result, DI benefits would be overpaid from August 1st to December 15th by $297 ($66 x 4.5 months). Overpaid amounts must be recovered by Sun Life. In this example, the retroactive Rehabilitation Earnings paid by the Employer will create the DI overpayment. Specific questions relating to your Rehabilitation Earnings and DI benefits should be addressed to your Compensation Specialist. Disability Insurance (DI) PlanImportant Reminder to Rehabilitation Program Participants
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