Do Long-Term Disability Benefits Have to Be Paid Back If I Start Receiving Social Security?

Social Security: If you become disabled due to an illness or injury, you could potentially secure financial benefits from multiple sources, particularly long-term disability (LTD) insurance and Social Security disability insurance (SSDI). Each type of benefit has an important role to play for people struggling with a disability. When combined, they can form a critical safety net that protects against financial ruin.

Yet the way that these two benefits interact can be confusing. For example, a common question asked by many prospective clients include: “If I get SSDI benefits, will I be on the hook to pay back the insurance company for any LTD benefits received?” The answer is – possibly. 

Applying for Multiple Programs

You may be able to receive both SSDI benefits and LTD benefits from a private insurance company simultaneously. Many individuals choose to prioritize disability insurance benefits. 

Please bear in mind that if you opt to apply for both SSDI benefits and disability benefits, there is a wait time for the LTD benefits to kick in (often 6 months, but will depend on your specific policy), after which you will start receiving payments (a portion of your paycheck) if your claim is approved. During this time, your SSDI application may still be pending.

After an individual is approved for SSDI benefits, they may be eligible for both monthly payments as well as past-due payments back to the date of their disability. This amount may be paid in installments or in a lump sum. A person who is also receiving LTD benefits will generally be expected to pay back the insurance company from this pay out from SSDI.

If you’re receiving long-term disability (LTD) benefits and become eligible for Social Security Disability Insurance (SSDI), you might wonder if you’ll have to repay any of your LTD benefits. The short answer is: it depends on the terms of your LTD policy.

Most long-term disability insurance policies include what’s known as an offset provision. This means that if you are approved for SSDI, the LTD insurer can reduce your monthly LTD benefit by the amount you receive from Social Security. For example, if your LTD benefit is $2,000 per month and you begin receiving $1,200 from SSDI, your insurer might reduce your LTD payment to $800 per month.

Here’s where repayment often comes in: once you’re approved for SSDI, Social Security typically issues retroactive payments dating back to when you became disabled. If you’ve been receiving full LTD payments during that time, your LTD insurer may request repayment of the “overpaid” amount—essentially the total of those retroactive SSDI benefits. This process is called reimbursement or repayment of the overpayment.

To avoid surprises, it’s important to read your LTD policy carefully or consult with an attorney. Some insurers will even require you to apply for SSDI as part of your LTD benefit conditions.

In summary, while you won’t necessarily have to pay back your entire LTD benefit, you may be required to reimburse your insurer for any overlap between SSDI back pay and previously paid LTD benefits. Understanding your policy and communicating with your LTD provider is key to managing this transition smoothly.

Hire an Experienced Disability Benefits Lawyer (Social Security)

The world of Social Security disability and long-term disability insurance benefits can be complex. If you are facing a health crisis and are unable to work as a result, the stress of handling these claims and the related paperwork can be overwhelming. A social security disability lawyer can help.

Since 1985, Bross & Frankel has represented clients in both long-term disability and Social Security disability cases. We work throughout Pennsylvania and New Jersey, advocating on behalf of people with disabilities to help them get the benefits that they deserve. To schedule a free claim review, contact our office today at (866) 761-7955, or reach out anytime online.