Long Term Disability
& Social Security Disability
Can you collect on both your Long Term Disability policy and collect Social Security Disability claims? For purposes of SSDI calculations, your LTD benefits are not evidence of “substantial activity” and thus do not offset your SSDI. However, many LTD policies do provide for an offset - that is, your LTD benefits paid by the private insurer will be reduced by whatever Social Security payment you receive.
Often, you will find that LTD carriers require claimants to apply for Social Security since Social Security benefits can reduce the amount of money that the LTD carrier must pay over the course of a claimant's lifetime. In addition, the Medicaid and Medicare benefits that accrue to Social Security beneficiaries can reduce the health insurance costs to a LTD carrier.
In a best case situation, your LTD carrier can help your Social Security lawyer work your Social Security case as the LTD adjustor may have a complete medical file. Other times LTD carriers offer no assistance.
You need to find out what your LTD policy says about Social Security. If you are receiving LTD benefits while you are waiting for a Social Security decision, and you eventually win your Social Security claim, your LTD provider may require you to pay back all of your lump sum to the LTD carrier as part of a reimbursement clause.
Some LTD carriers will pick up the cost of your Social Security legal fees, while others will not. Here, too, you need to find out your carrier’s policies as early as you can so you can make an informed decision regarding legal counsel.
If you are receiving or applying for long term disability, make sure to advise your Social Security lawyer.