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There are two circumstances in which you would have to repay benefits once you qualify for Social Security disability benefits:

The first is if you own an individual Disability policy that includes a Social Insurance offset benefit. Social Insurance benefits are benefits that the insurance company pays on a disability claim, but will offset dollar-for-dollar with social security benefits.

The second is if someone receiving benefits from a group Disability policy is eligible for social security benefits. Every group policy will have a provision in the contract that explains how benefits will be handled when a claimant is eligible for social security benefits. As much as group policies are great because they are less expensive and usually can be obtained without medical underwriting, the contract itself is not as good. In a sense, you get what you pay for. Most group disability policies will offset dollar-for-dollar with any social security benefits received, including personal and family benefits. In many situations the amount you will receive from the actual disability insurance company will be minimal.

More specific to the question being asked - it can take a long time for social security benefits to be approved and paid. Therefore, many times the insurance companies will pay out benefits during months in which a claimant was technically eligible for social security benefits. Once the social security benefits are approved and paid, the claimant will be expected to repay the insurance company for all benefits paid that would otherwise have been offset. A claimant will not be expected to repay benefits for months in which they were not eligible for social security disability benefits.

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Q: When you are awarded Social Security Disability why do you have to repay a portion of your benefit to the insurance carrier when you paid LTD benefits through your employer with after tax dollars?
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Related questions

Do you have to apply for Social Security Disability when you start getting Long Term Disability from your employer?

Yes, if your disability insurance policy has a benefit that is integrated with social insurance benefits.Most employer paid disability insurance policies are integrated with social security benefits, because of the lower premium they have to pay. Individual disability insurance plans can be purchased with or without social security integration. Benefits that are not integrated with social security benefits will not be affected whether you apply or not for social security disability benefits.


Does Virginia have long term disability?

You have to check into Social Security disability, if you don't have your own disability insurance (individual policy, or through your employer); It is recommended that you get your own Disability Insurance policy if your employer does not offer such benefits. Yes, there are disability insurance policies available in Virginia.


Can you receive disability from your job and disability from social security at the same time?

Yes, it is very common for disability insurance plans to include a clause for social security disability, meaning the insurance company will pay a portion of the monthly benefit, expecting that you would apply for social security benefits to pay for the "Supplemental Social Security benefits". In the event you get declined by Social Security, then the insurance company would cover the additional supplemental benefits. Employer group plans as well as individual disability insurance plans can include that clause.


Will moving to another state affect your disability benefits?

Your individual disability insurance policy is portable and benefits will not be affected by moving to a different state. If you have disability insurance through your employer, and move in a new state while working for the same employer, benefits will not be changed. However, if you leave your employer, you may lose the disability insurance benefits through a group DI policy. If you are currently disabled and are receiving disability benefits from the state, you will have to check with the new state regulations on social security DI; If you are receiving benefits through a personal/ individual insurance policy from an insurance company, then benefits are not going to be affected by the state of residence.


Are private disability insurance benefits taxable?

Individual disability insurance benefits are not taxable, because the premiums are paid with after-tax money. The employer paid disability insurance policies have taxable benefits due to the fact that premiums are paid by the employer with pre-tax money.


How do you extend CA state short term disability?

Are you currently disabled? If so, check with your employer and / or state's social security disability benefits. If not currently disabled, you can get individual long-term disability protection from a handful of disability insurance companies, or through your employer.


Could you collect disability if your employer does not provide disability it and your work requires you to be on your feet and have to have foot surgery and be off work for two months?

There are two ways that a person can receive Disability benefits: from Social Security and/or from an employer or individual Disability policy. If your employer does not provide Disability insurance coverage and you do not have your own individual Disability coverage, you will not be able to receive disability benefits, unless you live in a state that has a state-sponsored plan. In order to receive benefits from a Disability policy, you must actually own one or have coverage through your employer. Additionally you must satisfy the requirements of the contract in order to receive benefits. Social Security benefits only pay benefits on disabilities that are expected to last longer than 1 year or end in death, so you would not qualify for Social Security benefits.


Can your employer make you buy disability insurance?

Your employer should provide the minimum employee benefits, such as Medical, Dental & Life. You will pay additionally as a apart of the United States Government taxes, Social Security, Unemployment and Disability Benefits, which can also be shared by your employer. Additional employee benefits offered are Just that additional, and you can choose to Opt-Out of any additional benefits.


Is there supplemental disability insurance?

Yes, and it's recommended to add supplemental disability insurance to cover closer to 100% of your income. If you have disability insurance through your employer, your benefit will be capped at 66% of your income. The benefit received from a group disability policy (through your employer) is taxable. Supplemental disability insurance benefits are not taxable. You can add Catastrophic rider on an individual disability insurance policy, to cover up to 100% of your income in combination with your existing employer group DI.


Can employer paid disability plans be considered taxable?

Yes, employer paid disability insurance plans are normally paid with pre-tax money, therefore the benefits will be taxed.


What is FICA employee?

That would be an employee with an employer that is receiving any qualified earned income that is subject to the withholding requirements that employer has to withhold for The (OASDI) Old Age Survivor and Disability Insurance (FICA) (social security and Medicare taxes) all mean the same tax for social security benefits (SSB or SSDI). All mean the same thing. Retirement Insurance Program, Survivors Insurance Program, Social Security disability insurance program, Supplemental Security Income (SSI) program, Medicare Program


Can long term disability deduct what SD is giving you for your child due to your disability?

if your long term disability is integrated with social security disability, then yes. This is the case for most employer paid long term disability plans, or your employee benefits package. If the Long-Term DI policy is an individual plan, not through your employer - you could receive the full base benefit if it's not integraded with Social Security Disability Benefits.