For those who have private long-term disability insurance, you are the kind of person that plans ahead.
If you need it, you may wonder whether you can still apply for Social Security Disability Insurance as well. SSDI is, essentially, federal long-term disability insurance that is available to most workers in New Jersey.
Is SSDI voided if I have private long-term disability insurance?
For those who are worried about losing access to SSDI, your private long-term disability insurance will not affect your SSDI eligibility, according to the Social Security Administration. As such, you may qualify for benefits from both.
Offset clauses
Because of this, your private long-term disability insurance may actually have an offset clause that makes you apply for SSDI. They can even include provisions that force you to appeal your claim if it is denied. Then, your private benefit will be offset by the amount you receive from SSDI.
For example, if your private long-term disability insurance benefit is $1,500, and you receive an SSDI benefit amount for $500, the private insurance may reduce their payment to $1,000.
Private and federal claims may cross
Your private long-term disability insurance may even want documentation from the SSDI claim, in addition to the same documentation and medical records you used in your claim. This means that you need to keep both applications consistent.
Taxation changes
While your SSDI benefit amount is not affected by your insurance benefits, your taxes may be affected. This is because your SSDI benefits, while normally not taxed, become taxed if you have other sources of income, like your insurance benefits, if your combined adjusted gross income exceeds IRS thresholds.
The takeaway
The key here is that your private long-term disability insurance does not affect your SSDI benefits. However, it could affect your taxes, which you should plan for when you do your estate planning or deciding on which policy to choose.
