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Social Security Disability

tko683
Posts: 265
Joined: Aug 2011

Does anyone know how social security benefits work in conjunction with long term disability with your employer ie. do you loose your SS benefits if you are eligible to receive disability from your employer. My husband's company will pay him 60% of his salary when he goes on LT disability and I was trying to find out if this means he will not be able to get SS benefits. Thanks as always, you all are so helpful. Hugs to everyone! Teri

steveandnat's picture
steveandnat
Posts: 887
Joined: Sep 2011

You may want to talk to Social Security about that. I think you can earn half of what SS disability pays but you have to let social security know. Wish I could help more.
Jeff

mom_2_3
Posts: 965
Joined: Nov 2008

Teri,

I started with short-term disability with my employer and moved to long-term which was 60% of my salary. It was tax free as I had paid for the LTD premiums myself. There was a caveat in the LTD policy, however, that I apply for Social Security Disability. I did so and 6 months later received a check from SS which I then had to send to the LTD company. Going forward the LTD paid the balance of my 60% minus the SS payments.

For example, let's say my LTD amount per month was $5000. I would receive that amount every month. When SS was approved let's say that amount was $2000 per month. After SS was approved I would receive the SS check for the example $2000 and LTD continued to pay but at the rate of the example of $3000 (5000-2000). So in the end I received the same amount but SS is taxable while the LTD remained non-taxed.

Additionally, I mentioned that I had to send a check back to LTD once SS came through. So when SS determined my disability started 6 months previous, they sent me a lump sum check for 6 months times the SS amount. Because LTd had paid full amount to me during that period I had an obligation to send the exact amount the lump sum was to the LTD company.

I hope this made sense....

Amy

tko683
Posts: 265
Joined: Aug 2011

Thanks, that makes perfect sense. I was hoping he would get both but I can see why it doesn't happen that way. He does not pay the premiums for his LTD, they are paid by his company so it is probably taxable. I am trying to figure out our financial situation and not sure how we will survive on a 40% paycut and don't think this is a great time for me to start on new job on top of everything else.....just more stress...by the way the little girl on your profile is adorable!!

mom_2_3
Posts: 965
Joined: Nov 2008

Teri,

If I looked at the paystubs for that period of time when I was working and paying into LTD policy it actually showed I paid for my policy when in fact the company did so. So basically my LTD payment was $8 per pay period. My stub showed a deduction for that amount (like it was coming out of my pay) but there was another item for that same amount that the company paid back in (and was taxable to me). So the company increased my pay by the amount the LTD policy was but they listed it as compensation and therefore it was taxed. I'm not good at explaining things like this. Hope it makes sense. In my previous life I did software sales and was always talking databases and SQL statements....

So check out your husband's stub first and see if they did the same at his company.

Amy

PS That's my middle daughter, Ellie. I posted some new pics of my kids on my expressions page. She looks sweet but she was quite a bear today!

Kathleen808's picture
Kathleen808
Posts: 2361
Joined: Jan 2009

Teri,
It depends on what your husband's LTD policy states. I know that some policies allow full LTD payment and full social security payments. Social security will not reduce but LTD may or may not depending on the policy.

Aloha,
Kathleen

tko683
Posts: 265
Joined: Aug 2011

Thanks everyone. I am in the process of reading the 50 page document talking about LTD. At least I finally got my hands on it now....so just need to read it! Thanks for helping me to understand how this works! Hugs, Teri

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