Imagine this: you’re unable to work due to a disability, and you’re wondering how you’ll make ends meet. You’ve heard about long term disability insurance and Social Security disability benefits, but can you get long term disability and Social Security benefits at the same time? The answer might surprise you.
The truth is, in many cases, you can receive both long term disability and Social Security benefits simultaneously. Still, for those looking to squeeze every drop of advantage out of their benefits, here’s what you need to know.
Ready for the answer to “can you get long term disability and Social Security benefits at the same time”? We’ll walk through qualifying factors step by step, explore their perfect partnership mechanism closely – all with handy tips thrown in aiming at enlarging your rewards landscape. So, let’s get started!
Understanding Social Security Disability Insurance (SSDI)
Social Security Disability Insurance (SSDI) is a federal program that provides benefits to people who can’t work due to a disability. It’s not a handout, but rather an earned benefit that workers pay into through their Social Security taxes.
SSDI is designed to be a financial lifeline for those who find themselves unable to work and support themselves due to a severe medical condition.
What is SSDI?
SSDI is a social insurance program run by the Social Security Administration (SSA). It’s funded through payroll taxes, so if you’ve worked and paid into Social Security, you may be eligible for SSDI benefits if you become disabled.
According to the SSA, SSDI “pays benefits to you and certain family members if you are ‘insured,’ meaning that you worked long enough – and recently enough – and paid Social Security taxes on your earnings.”
How to qualify for SSDI
To qualify for SSDI, you must have worked in jobs covered by Social Security and have a medical condition that meets the SSA’s definition of disability. The SSA uses a strict definition of disability:
- You must be unable to do the work you did before due to your medical condition.
- The SSA must determine that you cannot adjust to other work because of your medical condition.
- Your disability must have lasted or be expected to last for at least one year or to result in death.
SSDI benefit amounts
The amount of your monthly SSDI benefit is based on your average lifetime earnings before your disability began. According to the SSA, the average SSDI benefit amount as of January 2021 was $1,277 per month.
However, benefit amounts can vary widely depending on your specific work history and the severity of your disability.
How to apply for SSDI
You can apply for SSDI benefits online, by phone, or in person at your local Social Security office. The application process involves providing detailed information about your medical condition and work history.
It’s important to note that the majority of SSDI applications are initially denied. However, there is an appeals process, and many people are able to secure benefits after appealing the initial decision.
Long-Term Disability Insurance (LTDI) Explained
Long-term disability insurance (LTDI) is a type of private insurance that provides income replacement if you become unable to work due to a disability. Unlike SSDI, which is a public program, LTDI is a policy that you can purchase on your own or through your employer.
What is long-term disability insurance?
LTDI is designed to replace a portion of your income if you experience a disability that prevents you from working. Typically, LTDI policies replace 50-60% of your base salary.
You can purchase LTDI on your own, but it’s often provided as an employee benefit. According to the Bureau of Labor Statistics, 34% of private industry workers had access to employer-provided long-term disability insurance in 2020.
How long-term disability insurance works
If you become disabled and unable to work, you can file a claim with your LTDI insurer. If your claim is approved, you’ll start receiving monthly disability benefits after a waiting period, which is typically 90 days.
The length of time you can receive LTDI benefits depends on your specific policy. Some policies pay benefits for a set number of years (e.g., 5 years or until age 65), while others pay benefits until you reach retirement age.
Qualifying for long-term disability insurance
To qualify for LTDI benefits, you must meet your policy’s definition of disability. This definition can vary, but it typically means that due to an illness or injury,
- You are unable to perform the material duties of your regular occupation.
- OR you are unable to earn more than 80% of your pre-disability income at your regular occupation.
Some policies also require that you are under the regular care of a doctor to qualify for benefits.
Long-term disability insurance benefit periods
The benefit period is the length of time you can receive LTDI benefits. Common benefit periods are 2 years, 5 years, 10 years, or until retirement age.
Choosing a longer benefit period will typically result in higher premiums, but it also provides a longer safety net if you experience a disability that prevents you from working for an extended period.
Can You Receive Both SSDI and Long-Term Disability Benefits?
If you have both SSDI and LTDI, you may wonder if you can receive disability benefits from both programs at the same time. The short answer is yes, but the eligibility rules are a bit more complicated than that.
Eligibility for receiving both SSDI and LTDI
You can receive both SSDI and LTDI benefits simultaneously if you qualify for both programs. However, qualifying for one program does not automatically qualify you for the other.
To receive SSDI, you must meet the SSA’s strict definition of disability and have paid enough into Social Security. To receive LTDI, you must meet your policy’s definition of disability and have paid your premiums.
How SSDI and LTDI work together
If you qualify for both SSDI and LTDI, your LTDI benefits may be reduced by the amount you receive from SSDI. This is because most LTDI policies have a provision that offsets your benefit by other income you receive due to your disability, such as SSDI.
For example, let’s say your pre-disability income was $5,000 per month, and your LTDI policy pays 60% of that amount, or $3,000 per month. If you then qualify for SSDI and receive $1,500 per month, your LTDI benefit would be reduced to $1,500 per month, for a total of $3,000 per month from both sources.
Impact of receiving SSDI on LTDI benefits
It’s important to note that while receiving SSDI may reduce your LTDI benefit, it won’t disqualify you from receiving LTDI altogether. As long as you continue to meet your policy’s definition of disability, you can continue to receive LTDI benefits, even if they are reduced.
In fact, many LTDI policies require you to apply for SSDI as a condition of receiving benefits. This is because the insurer wants to offset their liability with the SSDI benefits you may be eligible for.
Coordinating SSDI and LTDI claims
If you have both SSDI and LTDI, it’s important to coordinate your claims to ensure you receive the maximum benefit you’re entitled to. This may involve timing your LTDI claim to account for the SSDI waiting period, or appealing an SSDI denial while continuing to receive LTDI benefits.
It’s also important to keep your LTDI insurer informed of your SSDI application status, as they may require you to apply for SSDI and may offset your benefit once you start receiving SSDI.
Differences Between SSDI and Long-Term Disability Insurance
While SSDI and LTDI both provide benefits to people who can’t work due to a disability, there are some key differences between the two programs.
Qualifying criteria for SSDI vs. LTDI
One of the main differences between SSDI and LTDI is the qualifying criteria. To qualify for SSDI, you must meet the SSA’s strict definition of disability, which requires that you are unable to engage in any substantial gainful activity due to a medically determinable impairment that has lasted or is expected to last at least one year or result in death.
In contrast, LTDI policies often have a more lenient definition of disability, at least for the first two years of the claim. Many policies define disability as the inability to perform the material duties of your own occupation, even if you could work in another occupation.
Benefit amounts: SSDI vs. LTDI
Another difference is the benefit amount. SSDI benefits are based on your average indexed monthly earnings during your working years, with a maximum monthly benefit of $3,148 in 2021.
LTDI benefits are typically a percentage of your pre-disability income, usually 50-60%. The actual benefit amount depends on the terms of your policy.
Waiting periods for SSDI and LTDI
Both SSDI and LTDI have waiting periods before benefits begin, but they are different. For SSDI, there is a 5-month waiting period from the onset of your disability before benefits can start.
For LTDI, the waiting period (also called the elimination period) is set by your policy, but it’s typically 90 days. Some policies offer shorter or longer waiting periods, with corresponding changes in premium.
Taxation of SSDI and LTDI benefits
SSDI benefits may be taxable, depending on your total income. If your provisional income (your adjusted gross income plus half of your SSDI benefits plus any non-taxable interest) is more than $25,000 for an individual or $32,000 for a couple filing jointly, then a portion of your SSDI benefits will be taxable.
The taxation of LTDI benefits depends on how the premiums were paid. If you paid the premiums with after-tax dollars, then your benefits will be tax-free. If your employer paid the premiums and did not include them in your taxable income, then your benefits will be taxable.
Navigating the SSDI and LTDI Application Process
Applying for SSDI or LTDI can be a complex and time-consuming process. Here are some tips to help you navigate the application process for each program.
Gathering necessary documentation
For both SSDI and LTDI, you’ll need to provide extensive documentation of your medical condition and how it limits your ability to work. This may include:
- Medical records from your doctors, hospitals, and other healthcare providers.
- Results of medical tests and lab work.
- Treatment notes and disability reports from your doctors.
- Proof of your work history and income.
It’s a good idea to start gathering this documentation as soon as possible, even before you apply, so you have it ready when needed.
Filing an SSDI application
You can apply for SSDI online, by phone, or in person at your local Social Security office. The application process involves:
- Completing the online disability benefit application.
- Completing the Adult Disability Report, which asks for information about your medical condition, work history, and education.
- Providing the necessary medical and other documentation.
After you apply, the SSA will review your application and make a decision. If your application is denied, you can appeal the decision.
Applying for long-term disability insurance
The process for applying for LTDI benefits varies by insurance company, but it typically involves:
- Notifying your employer and insurer of your disability.
- Completing claim forms provided by your insurer.
- Providing medical documentation of your disability.
- Providing proof of your income.
Your insurer will then review your claim and make a decision. If your claim is denied, you can appeal the decision through your insurer’s appeals process.
Appealing denied claims
If your SSDI or LTDI claim is denied, don’t give up. Many claims are denied initially but are approved on appeal.
For SSDI, there are four levels of appeal:
- Reconsideration
- Hearing by an administrative law judge
- Review by the Appeals Council
- Federal court review
For LTDI, the appeals process varies by insurer but typically involves submitting a written appeal and providing additional medical documentation.
In both cases, it can be helpful to work with an experienced disability attorney who can guide you through the appeals process and help you present the strongest case possible.
FAQs in Relation to Can You Get Long Term Disability and Social Security
Can a person draw long term disability and Social Security at the same time?
Yes, you can get both if you meet the criteria. But SSDI may reduce your LTD benefits.
Which is better long term disability or Social Security?
LTD often pays more but SSDI can offer wider coverage. Your situation dictates which is best for you.
What happens to my Social Security if I go on disability?
Your regular benefits might switch to SSDI, potentially adjusting your payout based on your work history.
How long is most long term disability?
LTD usually lasts until retirement age or when you’re able to return to work, whichever comes first.
Conclusion
So, can you get long term disability and Social Security benefits at the same time? The answer is yes, but it’s not always straightforward. It depends on your specific situation and the terms of your long term disability policy.
The key is to understand how the two programs work together and to make sure you’re meeting all the eligibility requirements. And if you’re still not sure, don’t be afraid to reach out to a disability attorney or advocate for help.
Remember, these benefits are there to help you when you need them most. So, don’t let confusion or frustration keep you from getting the support you deserve. With a little knowledge and persistence, you can make the most of your long term disability and Social Security benefits.