Long-term disability insurance provides payments to replace income lost when a chronic medical condition causes you to be disabled and unable to earn a living. The policy may be purchased through an insurance company or it may be offered as a benefit to workers by an employer. A disability qualifying for payments through a long-term disability policy may also allow a worker to qualify for Social Security Disability benefits. If you find yourself in such a situation, you need to know how does long-term disability work with SSD.
Know the terms of your long-term disability policy
A long-term disability policy is a contract between you and the insurance company, so a good place to begin understanding how it works with SSD is by knowing its terms and conditions. For example, a long-term disability policy may require you to apply for disability benefits through Social Security as a condition to receiving payments under the policy. The insurance company does this to reduce its financial obligations under the policy by reducing what it pays each month by the payments you receive from SSD.
Another thing to be mindful of about long-term disability policies is a provision in some of them allowing the insurance company to make a claim against retroactive disability paid to you by Social Security. It takes time for a claim for SSD benefits to be processed by Social Security, so you may be owed retroactive SSD from the application date, which your insurance policy may force you to use to reimburse the insurer for all or part of the payments it made to you during that time.
London Eligibility can help you to understand how the benefits from your long-term disability insurance will be affected in the event you qualify for benefits through Social Security disability. A disability advocate can discuss the eligibility requirements you must meet to receive SSD and handle the application process on your behalf.
How to qualify for Social Security Disability
You may be eligible for benefits through the Social Security Disability Insurance program provided you worked long enough through employment or self-employment and paid Social Security payroll taxes. You earn work credits each year based upon your income and can earn up to four credits a year.
For 2021, you earn one work credit for every $1,470 earned through jobs or self-employment subject to Social Security taxes. The number of credits you need to have to qualify for SSD depends on your age when you first become disabled. A young worker needs a work history with a shorter duration than an older worker may need. There is also a recent work test requiring that some of the work must have occurred within a specific number of years of the onset of disability. The number of years for the recent work test is determined by your age.
If you have a work history that meets the requirements to qualify for SSD, the next requirement is that you must be disabled. The fact that you may be entitled to disability benefits through a long-term disability policy, or a state-administered short-term disability program does not automatically mean that you qualify for Social Security Disability.
To qualify for SSD, you must meet the definition established under federal law requiring that your disability meet each of the following conditions:
- 1). Prevent you from engaging in any substantial gainful activity.
- 2). Be caused by a medically determinable physical or mental impairment.
- 3). The impairment or impairments must have lasted or be expected to last for a continuous period of at least 12 months or be expected to cause death.
A disability that allows you to do any work you did in the past or other type of substantial gainful work may disqualify you from receiving SSD.
How does long-term disability work with SSD?
If you qualify for Social Security disability benefits, the amount you receive each month will not be reduced by payments you get from a disability insurance policy. Keep in mind that the terms of your policy may reduce the insurance benefits because of payments from SSD.
Be aware that payments received under a long-term disability policy may affect your eligibility for Supplemental Security Income benefits. SSI imposes limits on the income and resources you may have available to you and be eligible for benefits, so payments received from long-term disability insurance may disqualify you.
Speak with a disability advocate for sound advice and skilled assistance
The disability advocates at London Eligibility have years of experience handling SSD claims for disabled individuals. They are available to help with your SSD application and to answer any questions you have about how insurance policies paying benefits for disability work with SSD. Call them today for a free consultation.