If you are exploring long-term disability (LTD) benefits or Social Security Disability Insurance (SSDI), you are likely facing a challenging and uncertain time. Questions like “Can I qualify for both types of benefits?” or “Will one impact the other?” might be weighing on your mind. Understanding how LTD and SSDI work together is essential to ensure you receive the financial support you deserve.
Many LTD policies require you to apply for SSDI—and failing to do so could jeopardize your LTD benefits. Additionally, if you receive SSDI, your LTD payments may be reduced due to “other income benefits” or “benefit reductions” (commonly known as offsets). These reductions vary by policy and insurance provider, adding another layer of complexity to the process. Even if you navigate everything correctly, the timing, approvals, and financial interaction between the two programs can create confusion.
At Kantor & Kantor, we have guided countless clients through these challenges. We are here to provide straightforward, compassionate advice, helping you understand your rights and options every step of the way.
Understanding SSDI and LTD Benefits
SSDI provides financial assistance to those with disabilities severe enough to prevent them from working.
To qualify for SSDI, you must have a medical condition that meets the SSA’s definition of disability and is expected to last at least one year or result in death.
The amount of SSDI you receive depends on your average lifetime earnings prior to becoming disabled. You can also receive Dependent Benefits if you have children or other dependents. Upon qualifying for Social Security disability, you might also receive a lump sum payment to cover back benefits from the date your disability began.
Long-Term Disability (LTD) insurance, often provided as a part of employee benefits packages, serves to replace a portion of your income should you become disabled.
This type of insurance comes into play when you are unable to work on a full-time basis for at least 90 days due to an illness or injury. LTD benefits are a percentage of your salary, and policies vary widely in terms of coverage and duration. Insurance companies often make it extremely difficult to obtain these benefits.
Can You Collect Both SSDI and LTD?
It is possible to receive SSDI benefits and LTD benefits simultaneously. In fact, many LTD insurance providers require that claimants apply for SSDI benefits as a condition of receiving LTD payments.
Receiving LTD benefits will not influence your SSDI application process or the amount of SSDI benefits you receive. However, workers’ compensation or other public disability benefits may reduce the SSDI benefits you receive. Disability insurance benefits, including those from an LTD policy, do not affect your Social Security disability payments.
LTD Income Reductions Due to SSDI?
Spending your SSDI funds right away, especially after being without SSDI income, might be extremely tempting. However, for those receiving LTD benefits, you may not be entitled to keep some or all of the lump sum back-payment you receive.
This is because most LTD policies contain a special provision which reduces benefits received from other sources, including SSDI, state disability, and often worker’s compensation. These clauses are often titled “other income benefits” or “benefit reductions.” Be sure to review your policy to understand benefit reductions; if you can’t find it, don’t be afraid to ask your employer or insurer.
In cases where you receive a retroactive Social Security disability award, the LTD insurer will likely require immediate repayment of the overpaid benefits. This happens because the insurer initially paid LTD benefits without accounting for the Social Security offset, resulting in an “overpayment” according to the policy terms.
Further, once you begin receiving SSDI, your LTD benefits will be reduced going forward by however much you are receiving in SSDI on a monthly basis.
For example, your LTD benefits plan pays $2,500 per month and requires you to apply for Social Security disability benefits. If Social Security grants you $1,000 per month, your LTD insurer will likely reduce your monthly LTD payment to $1,500.
What Happens to My Benefits When I Reach Retirement Age?
Upon reaching your full retirement age (FRA) as defined by the Social Security Administration (SSA), your SSDI benefits automatically convert to Social Security retirement benefits. The amount of your retirement benefit is calculated by the SSA based on your earnings history and the age at which this conversion takes place.
LTD benefits, on the other hand, are typically subject to different rules. Most LTD policies have a maximum benefit period that ends when you reach your FRA. At that point, LTD benefits generally stop, leaving you to depend on your Social Security retirement benefits and any other sources of retirement income.
Certain LTD policies, especially those offered through employers, may have a shortened benefit period for disabilities that begin close to retirement age. It is crucial to review your LTD policy documents or consult with your insurer to fully understand how your benefits will change once you reach retirement age.
How Our Disability Benefits Lawyer Can Help
Our team is here to help you make sense of it all, fight for what you are entitled to, and take some of this heavy burden off your shoulders. Here is how we can help:
1. Understanding Your Insurance Policy
Insurance policies are often written in dense, complicated language designed to be hard to understand. We translate them into plain English, explaining exactly what your rights are and what you are entitled to under your policy or federal law.
2. Streamlining the LTD Application Process
Applying for LTD benefits is not as simple as filling out a form and waiting for a check to arrive. It often requires long-term disability documentation, medical records, and legal expertise to present your case effectively.
We help gather the evidence, draft compelling applications, and submit everything on time to minimize delays or denials. We make the process smoother, so you can avoid unnecessary stress.
3. Fighting Denials and Terminations
If your LTD claim has been denied or your benefits have been unfairly terminated, you do not have to accept that decision. Insurance companies sometimes make errors or, worse, act to intentionally violate your rights.
Our attorneys are skilled at building strong appeals and fighting back against unfair practices. Whether it is negotiating with an insurance company or taking your case to court, we will advocate for your rights.
4. Coordinating Multiple Benefits
If you are applying for both LTD and SSDI, things can get complicated quickly. These benefits often interact, and missteps can lead to reduced payments or delays.
We will create a strategy to ensure you get the maximum amount you are entitled to from your LTD claim, helping you avoid common pitfalls that can cost you money.
Contact Our Experienced Long-Term Disability Attorneys Today
If you are feeling unsure about how LTD and SSDI interact or are worried about making a mistake that could jeopardize your benefits, know that you are not alone. Many people face the same fears—whether it is dealing with confusing policy language, navigating denials, or figuring out how to handle offsets between LTD and SSDI payments.
At Kantor & Kantor, we are people helping people, and we look forward to helping you. That is why we take the time to listen, understand your unique situation, and tailor our approach to meet your specific needs.
If you have questions about LTD or SSDI—or need help figuring out where to start, contact us at 818-886-2525 for a consultation. Let us guide you through the process and help you secure the benefits you are entitled to.
