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Mental health claims continue to dominate disability trends

By: Benefits by Design | Tuesday September 2, 2025

Updated : Monday September 1, 2025

Mental health claims continue to dominate disability trends

Five years after the pandemic, the mental health crisis that it created has never fully recovered. While the factors contributing to the poor mental health of Canadians has changed, the fact remains that we are still suffering. The good news is that many more Canadians than ever before are seeking help and support.

Download the infographic: Trends in disability (PDF: 241 KB)

Mental health claims trends

Incidence rates for mental health disability claims continue to climb year over year. In 2025, they represent the largest source of open and new claims at 35%.

What’s more, these types of claims make up 70% of total disability costs, meaning plan members are off work for twice as long as any other type of claim.

Contributing factors

There are a number of reasons mental health claims are still dominating disability claiming trends.

Understanding the road to mental health support

Demographic shifts

Generation Z and Millennial employees do not have the same hangups when it comes to talking about their mental health. Outdated social stigmas which forced people to mask their emotions instead of facing them are eroding rapidly among the younger generations.

Chronic conditions

Many mental health diagnoses stem from physical chronic conditions. The sufferer eventually becomes depressed as their life circumstances change or become worse. Physical pain and the inability to enjoy activities they once loved can have strong negative effects on a person’s mental well-being.

The connection between physical and mental health

Financial uncertainty

Between pandemic recovery, tariff wars, recession worries, and the dwindling value of retirement savings, people have a lot to worry about financially. For many younger workers, the idea of owning a home and retiring comfortably seems like a distant dream, as wages have not kept up with inflation over the last 50 years.

Disability coverage advantages in uncertain financial times

External pressures

On top of everything else that can cause mental health distress, sometimes things completely out of your control have devastating consequences. Consider the floods, wildfires, ice storms, and other natural disasters Canadians face every year. Many deal with trauma for years after facing something of that magnitude.

Disability claims are still on the rise in Canada, mitigated only by a slight increase in reserves back in 2023 when the Bank of Canada interest rates were quite high.

It’s important we continue to protect employees with disability benefits that cover them for mental health claims. Employers can also consider providing benefits which focus on preventative care to help employees address their conditions – both mental and physical – before they become so bad they need to take time off work.