Do I need to apply for Social Security Disability while receiving Long-Term Disability?
When you become disabled, long-term disability benefits are provided to supplement your lost earnings. Long-term disability benefits are usually a portion of your earnings. Most long-term disability policies require that any extra income you receive be deducted (off-set) from your payable long-term disability benefits. This requirement is usually put in place to alleviate the long-term disability carriers’ costs in paying out benefits.
Considering that long-term disability carriers can reduce and off-set your benefit amount by any income your receive, long-term disability carriers usually require you to apply for Social Security Disability benefits. This is because Social Security Disability benefits are counted as “income” and therefore, the long-term disability carrier can off-set the amount they have to pay you by the amount you get from Social Security.
Social Security Disability Benefits Protect You
Is this unfair? Well, let’s consider two things. First, if your long-term disability carrier continued to pay you the entire benefit amount while you were also receiving Social Security Disability benefits, you could theoretically earn more than what you would have earned while working. This would not be fair to other workers.
Second, it is likely in your best interest to apply for and receive Social Security Disability benefits. For example, if the long-term disability carrier were to become insolvent or terminate your long-term disability benefits, as long as you remain disabled, the Social Security Disability benefits would remain payable. You can also receive Medicare from Social Security to help cover the cost of medical expenses, an option not provided by long-term disability plans.
Usually, long-term disability carriers have you apply for Social Security Disability benefits shortly after applying for long-term disability benefits. If you do not apply for Social Security Disability benefits, the long-term disability carrier may reduce or stop your long-term disability payments entirely.
To assist you in applying for Social Security Disability benefits, most long-term disability carriers refer you to a Third Party and that party helps you apply. These Third Parties are usually not affiliated with the long-term disability carrier and sometimes, you are assigned an “Advocate,” rather than an actual attorney.
This stage is the most critical and it is important that you know your rights.
Depending upon the terms of the policy, most long-term disability carriers cannot permanently reduce your long-term disability benefit payments until you begin receiving Social Security Disability benefits. Some long-term disability policies also include “minimum benefit” provisions and you may be entitled to more than you think. Also, you may not be limited to using the long-term disability carrier’s Third Party in applying for Social Security Disability benefits.
In fact, you may have the option of getting your own attorney to represent you in your Social Security claim. Lastly, other issues may also arise in the situation where you are awarded Social Security Disability benefits and the long-term disability carrier is now asking for reimbursement by a lump sum payment.
The expertise of a long-term disability attorney who practices and deals with both long-term disability and Social Security Disability claims is critical in your case. At any point where a situation described above arises, or if you begin to feel uneasy with how your long-term disability carrier is treating you, please give us a call so we can further discuss your options and rights.