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Social Security Benefits and Long-Term Disability Policies

Attorney Daniel Lenz blogs about Social Security benefits and long-term disability policies. This information is helpful to understand all of the sources of income if someone may become injured.

People who become too disabled to work can sometimes receive benefits from more than one source, including Social Security benefits from the Social Security Administration and long-term disability and income continuation benefits.  People who are receiving or eligible for more than one type of benefit can sometimes run into problems with how these two types of benefits.

Employees can get long-term disability benefits through their employers or they can be purchased privately.  Long-term disability benefits are governed primarily by the policy language and statutes, which have rules things like waiting periods, eligibility and procedures for getting benefits.  Many, if not most, long-term disability policies also include language about a person receiving benefits also receiving social security benefits.  While the specifics of each plan depend on the language of the policy, here are some general guidelines:

Offsets:  Many long-term disability policies require that those benefits be offset by any social security benefits that a person may also be receiving.  The offset usually just works one way – meaning only the long-term disability payments, not social security payments, get reduced. 

Required to Apply:  Since an insurance company or long-term disability provider usually wants to apply the offset, policies often require a claimant or someone already receiving long-term disability or income continuation benefits to apply for Social Security (and, in some cases, any other benefit to which the person may be entitled) and to continue the application process until they either get benefits or can go no further.  Sometimes, a long term disability carrier will help you find an attorney or representative to help you through the process.

Overpayments:  Overpayments are the area where people can get in some trouble.  If someone is receiving Social Security benefits AND long-term disability benefits, but does not inform their long-term provider, that provider can later come back and request the money that they would not have paid if they had applied the offset.  These amounts can really add up over time, and people can be faced with overpayments of thousands of dollars, which will either be collected in a lump sum or from future benefits.  If the language in the policy permits the collection of an overpayment, courts will generally uphold them.

It is very important to understand all the sources of income someone might receive if they become disabled, which can be difficult because each policy has to be looked at on its own.  Consulting with an experienced attorney ahead of time can avoid bigger problems down the road. 

People who become too disabled to work can sometimes receive benefits from more than one source, including Social Security benefits from the Social Security Administration and long-term disability and income continuation benefits.  People who are receiving or eligible for more than one type of benefit can sometimes run into problems with how these two types of benefits work.   Employees can get long-term disability benefits through their employers or they can be purchased privately.  Long-term disability benefits are governed primarily by the policy language and statutes, which have rules things like waiting periods, eligibility and procedures for getting benefits.  Many, if not most, long-term disability policies also include language about a person receiving benefits also receiving social security benefits.  While the specifics of each plan depend on the language of the policy, here are some general guidelines:   Offsets:  Many long-term disability policies require that those benefits be offset by any social security benefits that a person may also be receiving.  The offset usually just works one way – meaning only the long-term disability payments, not social security payments, get reduced.   Required to Apply:  Since an insurance company or long-term disability provider usually wants to apply the offset, policies often require a claimant or someone already receiving long-term disability or income continuation benefits to apply for Social Security (and, in some cases, any other benefit to which the person may be entitled) and to continue the application process until they either get benefits or can go no further.  Sometimes, a long term disability carrier will help you find an attorney or representative to help you through the process.   Overpayments:  Overpayments are the area where people can get in some trouble.  If someone is receiving Social Security benefits AND long-term disability benefits, but does not inform their long-term provider, that provider can later come back and request the money that they would not have paid if they had applied the offset.  These amounts can really add up over time, and people can be faced with overpayments of thousands of dollars, which will either be collected in a lump sum or from future benefits.  If the language in the policy permits the collection of an overpayment, courts will generally uphold them.   It is very important to understand all the sources of income someone might receive if they become disabled, which can be difficult because each policy has to be looked at on its own.  Consulting with an experienced attorney ahead of time can avoid bigger problems down the road.

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