Finding yourself unable to work due to a physical or mental disability can be extremely stressful. As you navigate the challenges that come with being disabled, it’s essential to consider options to stay financially stable. Two options that may be available to you are Social Security Disability Insurance (SSDI) benefits and long-term disability (LTD). The two programs have similarities but also key differences. 

In this article we will discuss the differences between programs and how they interact.

Long-Term Disability vs SSDI

LTD benefits are private insurance programs that many employers provide to support employees who need to take leave due to illness or disability. These benefits serve as wage replacement insurance for employees. LTD typically covers disabilities lasting from a few months to a few years. These policies usually replace a portion of your regular wages—generally a percentage of your salary—while you are out of work recovering. Since these programs are private, the rules and requirements can vary significantly depending on your company’s specific policy. It is important to note that not all companies offer an LTD policy. 

SSDI benefits are a federally funded government program that is regulated by the Social Security Administration (SSA). SSDI benefits are for individuals who become disabled meaning they are unable to work for at least 12 months, have earned sufficient work credits, and have paid into Social Security through FICA taxes.  

Key Differences 

Source of program 

• LTD: private insurance companies 

• SSDI: Federal government 

Eligibility 

• LTD: different for each insurance policy, usually requires some sort of documentation from medical professionals confirming a disability or illness  

• SSDI: based on the SSA’s requirements, must prove you are the SSA’s definition of disabled 

Benefit Amount 

• LTD: usually a percentage of your salary (60-80%)  

• SSDI: based on past earnings 

Duration 

• LTD: varies by policy, on average about 3 years. Short-term disability programs last less than a year 

• SSDI: For as long as you meet SSA’s criteria for disability before retirement age.

Can You Collect Both? 

Yes. However, usually if you are receiving LTD and SSDI benefits, there will be an offset percentage applied that will reduce your LTD benefit amount.  

If you are currently receiving LTD benefits and have applied for SSDI, it is recommended that you contact your LTD plan administrator to discuss how your benefits may be affected. Understanding the potential offset or adjustment to your LTD benefits because of receiving SSDI is crucial to managing your overall financial situation. Your LTD administrator can provide detailed information about the terms of your policy, explain how the offset process works, and help you plan for any changes in your benefit amounts. 

How Nyman Turkish Can Help  

Being in limbo and wondering how you will remain financially stable after receiving the news that you are unable to work can be extremely overwhelming. At Nyman Turkish, we are here to help. Our firm will guide you through every step of the process. Whether you are just starting to apply for benefits or dealing with a recent denial, we are on your side. Visit our contact page or call us at (877) 529-4773 for a FREE case review.