Do Long-Term Disability Benefits Have to Be Paid Back If I Start Receiving Social Security?
Disability: If you become disabled due to an illness or injury, you could potentially secure financial benefits from multiple sources, particularly long-term disability (LTD) insurance and Social Security disability insurance (SSDI). Each type of benefit has an important role to play for people struggling with a disability. When combined, they can form a critical safety net that protects against financial ruin.
Yet the way that these two benefits interact can be confusing. For example, a common question asked by many prospective clients is: “If I get SSDI benefits, will I be on the hook to pay back the insurance company for any LTD benefits received?” The answer is – possibly.
Applying for Multiple Programs:
You may be able to receive both SSDI benefits and LTD benefits from a private insurance company simultaneously. Many individuals choose to prioritize disability insurance benefits.
Please bear in mind that if you opt to apply for both SSDI benefits and disability benefits, there is a wait time for the LTD benefits to kick in (often 6 months, but will depend on your specific policy), after which you will start receiving payments (a portion of your paycheck) if your claim is approved. During this time, your SSDI application may still be pending.
After an individual is approved for SSDI benefits, they may be eligible for both monthly payments as well as past-due payments back to the date of their disability. This amount may be paid in installments or in a lump sum. A person who is also receiving LTD benefits will generally be expected to pay back the insurance company from this payout from SSDI.
Hire an Experienced Disability Benefits Lawyer:
The world of Social Security disability and long-term disability insurance benefits can be complex. If you are facing a health crisis and are unable to work as a result, the stress of handling these claims and the related paperwork can be overwhelming. A social security disability lawyer can help.
Since 1985, Bross & Frankel has represented clients in both long-term disability and Social Security disability cases. We work throughout Pennsylvania and New Jersey, advocating on behalf of people with disabilities to help them get the benefits that they deserve. To schedule a free claim review, contact our office today at (866) 761-7955, or reach out anytime online.
Understanding Long-Term Disability Benefits and Social Security
Long-term disability (LTD) benefits are designed to provide financial support when you’re unable to work due to a qualifying medical condition. Similarly, Social Security Disability Insurance (SSDI) helps individuals who meet specific eligibility criteria. While both aim to assist individuals, receiving benefits from both programs simultaneously can raise questions about repayment.
The Offset Provision
In most cases, LTD policies include an offset provision. This means that the insurance company may reduce the amount of LTD benefits by the amount you receive from SSDI. However, if you initially receive LTD benefits and later are approved for SSDI, the insurance provider might require reimbursement for the overpaid amount. This is because SSDI benefits are typically retroactive, covering the period during which you were also receiving LTD payments.
Reimbursement Scenarios
For example, if your SSDI claim is approved after a year of receiving LTD benefits, SSDI may issue a lump-sum payment for the retroactive period. If this overlaps with the LTD payments, the insurance company can request reimbursement for the difference.
Exceptions to Repayment
It’s essential to review your LTD policy for specific terms. Some policies may waive repayment in particular circumstances. Seeking guidance from a legal or financial expert can clarify your obligations and rights.
Conclusion
If you start receiving SSDI, you may need to pay back a portion of your LTD benefits due to the offset provision. Understanding your policy and consulting with an expert can help you navigate this process effectively.
