LTD and SSDI at the Same Time: Yes, You Can Get Both — but Here’s How the Offset Works

If you’re receiving long-term disability benefits and wondering whether you can also collect Social Security Disability Insurance, the short answer is yes — you can usually receive LTD and SSDI at the same time. But there’s a catch that surprises almost everyone, and it has to do with how much of your monthly check actually comes from your insurer.

Bottom line: Yes, you can usually receive LTD and SSDI at the same time. But most employer-sponsored group long-term disability policies let the insurer reduce your LTD payment by the amount of your SSDI benefit. That means your total monthly disability income often stays about the same — the insurer just pays less of it.

Why Your LTD Insurer Wants You to Apply for SSDI

This is the part that catches most people off guard.

When your long-term disability insurer tells you to apply for Social Security Disability, it can feel like they’re trying to help. Some insurers even offer to connect you with a representative to walk you through the SSDI application process.

But the reason your insurer pushes you to apply is straightforward: every dollar paid by SSDI is a dollar less that the LTD insurer owes.

Many employer-sponsored group LTD policies — especially those governed by ERISA — contain a disability insurance offset provision. This clause allows the insurer to reduce your monthly disability benefits by other qualifying income you receive, including SSDI. The most important reason these policies require you to apply for Social Security is that it reduces the insurer’s financial obligation.

This isn’t illegal. It’s built into the policy. But it’s important to understand the insurer’s financial incentive so you can make informed decisions about your benefits.

And one more thing to be aware of: the representatives insurers connect you with work for the insurer, not for you. You always have the right to hire your own Social Security disability attorney. The current SSDI attorney fee cap is $9,200 or 25 percent of your past-due benefits, whichever is lower. Under many LTD policies, reasonable attorney fees are excluded from any overpayment calculation — which means hiring your own attorney may not cost you anything extra. Check your policy language to confirm.

How the LTD and SSDI Offset Works

Here’s a simple example of how your monthly income changes when you receive LTD and SSDI at the same time.

Let’s say your LTD policy pays 60 percent of your pre-disability income, which comes out to $3,000 per month. Before SSDI approval, you receive:

• LTD benefit: $3,000
• SSDI benefit: $0
• Total monthly income: $3,000

Then your SSDI claim is approved at $1,500 per month. Now your income looks like this:

• LTD benefit (after offset): $1,500
• SSDI benefit: $1,500
• Total monthly income: $3,000

Your total stays the same. But your insurer is now paying half of what it was before. The government — through SSDI, which you paid into through years of payroll taxes — is covering the rest.

Whether your insurer can offset benefits depends on the specific language of your disability policy. Not all policies work the same way, which is why reviewing your plan documents matters.

What Happens to Your Check When a Retroactive SSDI Award Arrives

Here’s where things get more complicated — and more stressful.

SSDI applications typically take many months, sometimes over a year. During that time, your LTD insurer keeps paying your full benefit. When Social Security finally approves your claim, you receive a lump-sum back payment covering all the months you were waiting.

Your insurer then looks at that retroactive period and says, “We were paying the full amount during those months, but SSDI should have been offsetting part of it. You owe us the difference.”

This is called an LTD overpayment demand, and it can add up to tens of thousands of dollars. For a detailed breakdown of how these demands work and where insurers get the math wrong, see our article on [how LTD overpayment demands work after SSDI approval].

The key thing to remember: don’t panic, and don’t immediately hand over the money. These calculations are worth reviewing carefully, because insurers frequently make errors that inflate what they say you owe.

What Happens If You Don’t Apply for SSDI

You might be thinking — if applying for SSDI just reduces my LTD check, why bother?

There are a few important reasons:

• Your policy may require it. In many employer-sponsored group policies, applying for SSDI is required as a condition of continued LTD benefits. Failing to apply can have real consequences.
• Your insurer can apply an estimated offset anyway. Some insurance companies preemptively reduce LTD benefits based on estimated SSDI payments, even before you’ve been approved. In other words, they may cut your check whether you apply or not.
• They can suspend or terminate your benefits. Some ERISA disability policies stipulate that failure to comply with all policy requirements, including applying for SSDI, can lead to suspension or termination of benefits.

Not applying is rarely a good strategy. But understanding why the insurer wants you to apply helps you make smarter decisions about the process. And as always, the policy language controls — so review your plan documents or have an attorney review them for you.

Why Having Both Benefits Still Protects You

Despite the offset, collecting LTD and SSDI at the same time is still in your best interest. Here’s why:

• It’s a safety net if your insurer terminates your LTD. LTD insurers periodically review claims and can cut off benefits if they decide the medical evidence no longer supports your claim. If that happens, SSDI can provide ongoing income while you [appeal a disability insurer’s termination of benefits].
• SSDI gets cost-of-living increases. SSDI provides annual cost-of-living adjustments (COLA), and these increases are not typically included in LTD offset calculations, depending on your policy language. That means your total income can inch up a little each year. Most LTD policies don’t include their own COLA, so this is one of the few ways your monthly disability benefits keep pace with inflation.
• SSDI approval can strengthen your LTD claim. A favorable decision from the Social Security Administration can support your position if the insurance company later tries to terminate your LTD benefits. It’s harder for an insurer to argue you’re not disabled when the federal government has already determined that you are.
• SSDI can outlast your LTD. Many group long-term disability policies have a maximum benefit period or end at retirement age. SSDI continues as long as you remain disabled, and it converts to retirement benefits at full retirement age.

When Should You Talk to a Disability Lawyer About LTD and SSDI?

Not every situation requires legal help. But there are certain moments when talking to an experienced disability attorney can make a real difference:

• You’ve received an overpayment demand after your SSDI back pay was awarded.
• Your insurer is applying an estimated SSDI offset before you’ve even been approved.
• Your LTD benefits were reduced by an amount that doesn’t match your SSDI award.
• Dependent SSDI benefits are being included in the offset and you’re not sure the policy allows it.
• You’re not sure whether your attorney fees were properly excluded from the overpayment calculation.
• Your insurer is pressuring you to use their representative instead of your own attorney for the SSDI application.
• You’re worried that applying for SSDI could affect your LTD benefits in ways you don’t fully understand.

Claimants should review plan documents, summary plan descriptions, and any repayment demands carefully. If something doesn’t look right, it’s worth getting a second opinion.