My government position pays a bonus at end of year called “years of service pay” since being on LTD they are saying not entitled but I am still an employee of the service as our LTD is in house Do they have a right to deny this?

Without more information, we cannot say for certain. Often, bonuses are eligible for 'active' employees, so it's not uncommon for the insurer not to pay it out while on LTD, but can be paid upon a return to active duty. Further, it's possible that if you were to receive employment income while on LTD, your insurer could offset your monthly benefits, so you would not actually benefit from that income.
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