A complete A&S tax picture includes government benefits:
Employment Insurance (EI) sickness benefits: EI sickness benefits are taxable income. They replace up to 55 percent of insurable earnings for a maximum of 15 weeks. Any private STD plan that offsets EI benefits must account for this.
CPP/QPP disability benefits: CPP disability benefits are taxable income. When a group LTD plan integrates with CPP disability, the taxable CPP benefit reduces the gross LTD benefit. The net after-tax position of the claimant depends on marginal rates and how the plan integrates.
Workers' compensation benefits: in most provinces, workers' compensation benefits (paid under provincial legislation for work-related injury or disease) are not taxable to the recipient. The WCB benefit does not generate a T4. A group LTD policy will typically offset workers' compensation for a covered period of disability to maintain the all-source maximum.