If a Virginia resident receives long-term disability (LTD) benefits, he or she may be required to also file for Social Security Disability. The LTD provider will reduce the amount of money an individual receives by the amount a person receives from the government. For instance, if someone were receiving $1,000 a month in LTD benefits and received $500 from the government, the LTD provider would reduce its payout by $500.
It is important to note that a person could receive back benefits from the government. This is because a person may be entitled to them from a date prior to filing an initial benefit application. In such a scenario, the LTD provider could be entitled to some or all of that money. In some cases, the money is due as soon as an individual receives the retroactive pay. In others, the insurance company will reduce its monthly payment until the overpay is resolved.
A LTD insurance provider could offset other forms of pay as well. Income that is eligible to be offset includes workers' compensation or short-term disability benefits. Money that is not subject to LTD insurance offset include income derived from a 401(k) or an IRA. Typically, the yearly cost-of-living adjustment and legal fees are not factored into an offset.
Those who want to know more about how SSD benefits could impact their LTD benefits may want to consult with an attorney. While the insurance company may suggest talking to a professional from outside the legal field, this may not be a good idea. An attorney may be better able to answer an applicant's questions about an offset or help an applicant appeal any decision to deny SSD benefits.