Summary
Learn how private Short-Term and Long-Term Disability insurance benefits may affect your eligibility for Social Security Disability and SSI benefits, including how insurance offsets work.
Many people are confused about how private insurance fits into a disability claim. A common question we hear is, “If I have private coverage, can I still qualify for Social Security Disability?”
The short answer is yes.
Understanding Short-Term and Long-Term Disability Insurance
Many employers offer Short-Term Disability (STD) and Long-Term Disability (LTD) insurance benefits. Some individuals also purchase their own private disability policies.
Short-Term Disability benefits typically cover a limited period of time, often 3 to 6 months, after you become unable to work. Long-Term Disability benefits may continue for several years or even until retirement age, depending on the policy.
These benefits are paid by an insurance company, not the government.
How Private Disability Insurance Differs from Social Security Disability
It is important to understand that STD and LTD claims are often decided under different standards than Social Security Disability claims.
For example, many long-term disability policies initially use an “own occupation” standard. This means you may qualify for benefits if you are unable to perform your specific job, even if you could potentially perform another type of work.
In contrast, Social Security looks at whether you can perform any job that exists in the national economy, not just your past work.
After a certain period, commonly 24 months, some long-term disability policies shift to an “any occupation” standard, which becomes more similar to Social Security’s evaluation.
Even then, the definitions and requirements are not always identical.
Because of these differences, it is possible to be approved for long-term disability benefits but denied Social Security benefits, or vice versa.
Can You Receive Long-Term Disability and SSDI Benefits at the Same Time?
Another important issue is the “offset” provision found in many long-term disability policies.
Insurance companies often require claimants to apply for Social Security Disability benefits. If you are approved for SSDI, your long-term disability carrier may reduce the amount it pays you by the amount you receive from Social Security.
For example, if your LTD policy pays $2,000 per month and you are awarded $1,200 per month in SSDI, the insurer may reduce its payment to $800.
In most cases, this does not reduce your total combined monthly income, but it does change who is paying the benefit.
How Does Private Disability Insurance Affect SSI?
For individuals applying for Supplemental Security Income (SSI), the analysis is different.
SSI is a needs-based program with strict income and asset limits.
While simply having a private insurance policy does not disqualify you, any payments you receive from a private disability policy may count as income and could reduce or eliminate your SSI benefits.
We Can Help You Understand Your Disability Benefits
Our office handles Short-Term Disability, Long-Term Disability, SSDI, and SSI claims.
If you are dealing with private disability insurance, Social Security, or both, we can review your policies, explain how offsets work, and guide you through the process so you understand your rights and options every step of the way.
