If you’re facing a disabling condition that prevents you from working, you may be wondering whether you can receive both Social Security Disability Insurance (SSDI) and long-term disability (LTD) insurance benefits simultaneously. The short answer is yes—but there are important nuances you need to understand about how these two programs interact.
They Serve Different Purposes
SSDI is a federal government program that provides benefits to workers who have paid into the Social Security system and become disabled. To qualify, you must meet Social Security’s strict definition of disability: unable to perform any substantial gainful activity due to a medical condition expected to last at least 12 months or result in death.
LTD insurance, whether through your employer or a private policy, is a contractual agreement that replaces a portion of your income if you become disabled according to your policy’s definition. These definitions are often less restrictive than SSDI’s requirements, particularly for “own occupation” policies.
You Can Receive Both Benefits
Because these are separate programs—one governmental and one private—you can legally collect benefits from both. Many disabled workers successfully receive payments from both sources. However, your LTD policy likely contains an “offset” provision that significantly affects your total benefit amount.
Understanding the Offset Provision
Most employer-sponsored LTD policies include offset language that reduces your LTD benefit by the amount you receive from SSDI. Here’s how it typically works: If your LTD policy promises 60% of your income ($3,000 monthly) and you’re approved for $1,500 in SSDI benefits, your insurance company would reduce your LTD payment to $1,500. You’d still receive $3,000 total, but it comes from both sources rather than LTD alone.
This offset protects insurance companies from paying full benefits when you’re receiving other disability income. The policy aims to replace lost income, not provide duplicate coverage that exceeds your working wages.
Individual LTD policies often have no offset or only partial offsets, making them more valuable if you anticipate applying for SSDI. Always review your specific policy language to understand how offsets apply.
Why Apply for SSDI Even With an Offset?
Despite the offset, applying for SSDI while receiving LTD benefits offers significant advantages. First, most LTD policies actually require you to apply for SSDI as a condition of receiving benefits. Failing to do so could result in termination of your LTD payments.
Second, SSDI provides additional benefits beyond monthly payments, including Medicare eligibility after 24 months and potential benefits for your dependents. Third, SSDI continues indefinitely as long as you remain disabled, while many LTD policies have time limits.
Finally, if your LTD benefits end but your disability continues, SSDI provides ongoing income protection through retirement age.
The SSDI Lump Sum Consideration
If you receive SSDI retroactive benefits in a lump sum, your LTD carrier may claim the entire amount as reimbursement for past payments. An experienced disability attorney can often negotiate this amount and protect a portion of your lump sum.
The Bottom Line
You can collect both SSDI and LTD benefits, though offsets usually prevent you from receiving the full amount from both sources simultaneously. Understanding your policy’s offset provisions and the strategic advantages of SSDI eligibility will help you maximize your total disability benefits and protect your long-term financial security. Consider consulting with a disability benefits specialist to navigate this complex intersection effectively.
