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Can a disability insurance company claim an overpayment for social security disability benefits payable to a child as result of the parent’s disability?

Our disability lawyers are contacted on a weekly basis with this exact question. The short answer is that most disability insurance policies contain language that allows a disability company to setoff your monthly disability insurance check by the amount both you and your children receive from Social Security as a result of your disability. Most disability insurance companies have drafted policy language in a manner that makes it very difficult to exclude child disability benefits from your monthly disability benefit check. There have been a few cases around the country in which courts have found that a disability carrier could not seek an overpayment for child social security disability benefits. In these rare cases, the policy language giving the disability company the right to seek an overpayment was not drafted clearly.

For example, you may want to review a Court Order in the case of Carstens v. United States Shoe Corporation’s Long-Term Benefits Disability Plan, (N.D. Calif., Oct. 31). While this case did not allow the disability company to offset child benefits, the policy language was different than the majority of group disability insurance policies. The Cartsens case also discusses many of the other disability cases around the country that dealt with the same issue.

In addition to Carstens, a similar ruling was issued by the Illinois Appellate Court. In Meeks v. Mutual of Omaha Insurance Co., 70 Ill.App.3d 800, 802, 388 N.E.2d 1362, 1363 (3d Dist. 1979), the court disallowed an insurer’s deduction of benefits awarded to the dependent of a Social Security disability benefits recipient.

There are unfortunately numerous cases which establish that a disability carrier can seek overpayment for all social security disability benefits payable. Two of the most quoted United States Federal Court Of Appeals cases are Anweiler v. Aetna and Godwin v. Sunlife. Neither of these cases specifically discussed child disability benefits.

In any disability claim, a disability claimant should retain a disability insurance lawyer to specifically review the applicable policy language regarding an offset for child social security dependent benefits.

There are 89 opinions so far. Add your comment now.

Wendee Saint James:

I was receiving LTD through Metlife as well ass SSD. At the two year mark, (2009) I was cut off from LTD because my illness (mental) had a two year cap in the LTD contract. All other illnesses are covered until age 65. I have checked with several local attorneys, who had all said that this was common practice and perfectly legal, so I know this isn’t going to change for me. My question is, in these enlightened times with so much focus on equity in the workplace, how can this still be a legal practice. It saddens me on so many levels, it seems so totally 19th century, is burning the mentally ill at the stake next? I might also add that my income was cut in half, which has of course added a major additional strain to my already fragile condition. Any thoughts or advice?

Attorney Greg Dell:

Wendee,

It is sad that many disability companies limit mental nervous claims to two years. The companies that write these disability policies are in business to make a money and based upon the number of mental nervous claims they receive each year, they have determined that a 2 year limitation is necessary in order to limit their financial risk. The government and department of insurance have not done anything to regulate this issue as they don’t really have the power to disturb the terms of the contract. When your employer purchased the MetLife policy, they could have paid more money and asked MetLife to exclude the 2 year mental nervous limitation.

Mary Cromer:

If you are not the PR for your child’s benefits they receive from you, can your LTD require you to reimburse the retro and deduct your childs from your retro?

Attorney Greg Dell:

Mary,

I am assuming by PR, you mean Personal Representative. If you are the guardian or have legal custody of your child, then there would still be an SSDI setoff for SSDI benefits that are paid as a result of your disability.

Brian House:

Like many others on this site, I have a question regarding a LTD company seeking to collect over payment of “Family Benefits” received by children of a parent with a disability.

From the very beginning, the benefits received were in the name of my children and they filed taxes each year along with my wife serving as the Personnel Representative. I do not include the amount in my filed taxes. Now, I presented each LTD company with this scenario each time they inquired about the income reported and in all cases the offset was not applied thinking the particular scenario trumped what was in the policy. The individuals I spoke to told that their children were exempt since my wife was the Personnel Representative. I have even documented the name of the person I spoke to at UNUM and have documentation sent to the company.

Is it legal for them to collect because I did the right thing on several occasions? How far back can they collect as I have been on disability since 2005? Thanks.

Attorney Greg Dell:

Brian,

They may be able to only go back as far as the statute of limitations in your state. You can also attempt to negotiate with them if you think they are entitled to an overpayment.

Mary Higgins:

My brother is on disability for lymphoma and he is very sick. He is supposed to have a bone marrow transplant this month. He has a young daughter, 11, that lives with an ex-wife in a different state. He only sees her once a year and cannot claim her tax deductions. His ex-wife filed for SSDI for the child because of his illness and the money goes to the ex-wife for the child. Reliance has decided that that they are going to do an SSDI offset on his disability, and now say they overpaid him by nearly $20K. Yesterday, they notified him that they want their money by the end of the month. If they don’t get it, they say they will stop his payments until the money is paid back. He has no other income. He is canceling his transplant because he had no income now to even pay his medical deductible. He is severely immuno-supressed and is not supposed to be out in public with germs. This company, Reliance, is forcing him back to work, which will kill him. Are there any options? Thanks.

Attorney Greg Dell:

Mary,

If the daughter is not his dependent, then he may be able to avoid the offset. He can also try to work out a payment plan with Reliance.

Chris Mickle:

I am Mary’s brother from the previous comment, fighting cancer and standing by for a 2nd bone marrow transplant. Reliance Standard has started deducting $700/month from my LTD payments and now wants $20k for “overpayment” of SSDI for my daughter within the next 10 days (14 days from date of letter). Although my daughter has not lived with me, nor have I claimed her as a dependent since 2002, when she was 2 years old, Reliance Standard defines her as my dependent by being my “biological child”… which, of course, she is. I have never been involved in any of the SSDI process, that having been initiated and administered by her mother, both my daughter and her mother live in Texas. It was always out of my hands. I have never had any contact with any of the SSDI money associated with my daughter, those payments go straight to her mom. Reliance Standard is going to reduce my monthly LTD to a minimum (they can go as low as $100/month) to recoup the “overpayment”, which puts my transplant clearly out of reach and this also requires me now to seek some kind of employment in spite of my critical health (critical blood counts with an ANC of 0!).

This is all very wrong. How can an insurance company hand down a death sentence to someone who paid their policies in good faith for many years?

Please help me fight these people. And win.

Best regards,
Chris

Chris:

Thank you for making this forum available. This is Mary’s (from above) brother again with an update – I hope to read your comments on the matter.

Reliance Standard, my LTD insurance company, is now going to reduce my LTD payment each month to the legal minimum (I believe under these circumstances they can go as low as $0) until the $20k they claim they overpaid me is recouped. This will take well over a year and reduces our income to well below our overhead. Of course, this effectively cancels my upcoming required bone marrow transplant as we could not possibly absorb any of the usual lingering medical costs. This also now also forces me to find some kind of employment just to survive and to try and keep our home.

Reliance Standard knows very well my medical condition – that the bone marrow transplant is a necessity and that my blood counts are critical (my absolute neutraphil count – these are the white blood cells that protect against infection – is an alarming “0″). My proximity to any sick persons – even the common cold – is cause for extreme alarm. When I get a cold it turns into Pneumonia within days as well as several awful days in the hospital. A critical infection will simply be a matter of time in the workplace. Never mind my ability to physically actually do the work at hand. How can an insurance company force a customer into harm’s way like this? Are there no laws to protect people in my situation?

So what should I do? What is the best course of action for relief from Reliance Standard? And, if I can pull it off physically, can I earn money without jeapordiing my SSD payments and those separate SSDI payments that go to my daughter in Texas?

BTW – I am in Denver – I think it’s the 10th District Court. I hope to hear from you soon – and thank you in advance.

Chris

Attorney Greg Dell:

Chris,

If you earn any money then you will lose your SSDI benefits and no longer be eligible for Reliance Standard Benefits once the overpayment is completed. Reliance Standard has the ability to negotiate a repayment plan with you should they want to.

Candy Stone:

I just got approved for my SSDI. I had waited two years. I got approved 4/2012, but I started short term in 2010, until the term was up for short term and I started long term in 8/2010 until today. If I don’t repay Hartford back, can they garnish my benefits fromm SSD? Also, if I put my retro-pay into my minor child’s name, can they withdraw the money out of my child’s account?

Attorney Greg Dell:

Candy,

Hartford cannot garnish your SSDI payment, but Hartford can stop paying you until they recover their overpayment. Hartford can also sue you to recover the overpayment. Hartford cannot touch your child’s money.

Rose:

My husband was awarded SSDI in 2011. At that time, both of our children were also awarded SSDI due to his disability. Now MetLife, who originally told my husband that the children’s money did not needed to be reported, is asking for his payments to be reduced because of it. They also want the government document that states the money our children is receiving, which I am refusing to provide, right now.

I view this as they are taking money that the government awarded the children, not my husband. Their money goes into their own account and my husband is not allowed to touch it. Unfortunately, the children will not have these benefits moving forward if this is legal.

Attorney Greg Dell:

Rose,

If your husband’s MetLife disability policy contains language providing an offset for any dependents, then MetLife can legally take the offset. We agree with you that it is not fair and should be illegal.

Pam Gaddis:

Can MetLife take the lump sum for my children that was paid out to a guardian instead of the parent? Parent did not receive this money.

Attorney Greg Dell:

Pam,

Great question. If the guardian is receiving SSDI benefits as a result of your disability, then it is likely that MetLife will still be entitled to a setoff each month.

Amy:

My husband was on long term disability for a year and half when he was finally awarded SSDI. We have 3 children who also received it in their names as well and we received retro checks for all. LTD company sent me a letter of total I owed them for retro SSDI and I paid, then they sent letter to say all was paid. Since then I’ve received 2 more letters saying I owe more for family and each time the amount increases even though we are no longer on LTD due to 2 year limit. The form I signed with LTD company stated we would have to repay for any other money “he” received for that disability and nothing about family. Also one of my kids is “disabled” and we even filed with Social Security while my husband was disabled. Can LTD company still come after “disabled” child’s money as well as my other children?

Attorney Greg Dell:

Amy,

The disability carrier is not entitled to come after any funds that your disabled child receives a result of his or her own disability.

Lindsay:

I’m writing in regards to getting a better understanding regarding Rose’s question.

I myself have been on disability for 18 years with SSDI and ING as my LTD. In March of 2011 SSDI asked me why had I not applied for my 3 children to receive benefits since I had been disabled for so long. So I did, and they actually retro-paid 1 year. I was told by SSDI that since it was for in my children’s names, that it did not affect my LTD. I live in California and my LTD is in Minnesota. I reviewed all my LTD paperwork and the only thing it states is that I would receive 66 2/3% of my base salary and would be integrated with any other disability benefit payments that I would be receiving. It does not have anywhere that it mentions any ofsets regarding any dependents SSDI payments. I just got a request by my LTD company to update income earnings and of course I mention the children’s income and they have stated that this is additional income to my earnings and that my LTD will be stopped because this is considered offset income even though it is for my 3 dependents. Is this legal, and do I legally have to pay back to them my children’s money based on my disability?

Attorney Greg Dell:

Lindsay,

The setoff request is only legal if your policy contains language which specifically allows ING to take the setoff. You need to ask ING to send you the language they are relying upon to offset your policy. It may be possible that your disability policy with ING does not have the setoff language.

Regina Moore:

My question is how Reliance Standard figure up the overpayment amount the will get if SSD approved and I recieve retroactive payback. I called them and they would not give me an example amount of this. All they would say is that they will get all or most of it no matter what it is. Can LTD companies not give you an answer or example for this so you can see how this is done? They state that if I am approved for backpay, the LTD benefit are recalculated, and I will be required to reimburse RSL the amount of overpayment and that is usually all of it. I dont understand how this is calculated? Can u help?

Attorney Greg Dell:

Regina,

You should always deal with your disability insurance company in writing. Send them your specific question in writing and they will provide a written response. Tell them that you want a written response. I don’t know the specific facts of your claim so I cannot answer your question. We have other frequently asked questions on our site about SSDI overpayment claims which may have the answer you seek.

Steve Olson:

Greg,

First, thank you for taking the time to answer all these questions. I have been disabled for the past 3 years with a seizure disorder. Liberty Mutual was paying for my STD and LTD since the beginning. I was awarded SS recently. Received a back check for about $12,000. Gave it back to Liberty Mutual. Now my son Aaron received a check from SS for about $7,000. Is this our money? Do we have to also give that to Liberty Mutual since they took my first check? How do I find out what to do? We could really use that money since I am losing helath insurance at the end of the month and the costs are just too much for our family to do.

Attorney Greg Dell:

Steve,

If your son received the check from SSDI as a result of your disability, then it is likely that you will need to return the funds to Liberty Mutual.

Daniel B.:

Dear Attorney Dell,

As with the others here I have been on SSDI for 4 years and received short / long term benefits and since that time and was awarded a hefty check which as with others had returned to Mutual of Omaha. Now my son is 17 and he was awarded also a lump sum as well last year living with me and having slight Crohn’s disease. I was required to send back overpayment also from his sum to Mutual and since this time we used the monies for bills , home improvement etc. Problem is my son moved out and wants his lump sum and reported it to S.S. Mutual has reduced all my future benefits to the minimum of $100.00 and will continue to do so until this money is repaid.

Now S.S. is calling me saying the money are owed to son. The insurance co. too want their money or they will keep the reduced rate towards me and may even sue. Since the $$ is now gone who gets what ??. I would be happy to give my son this $$ back in payments each month out of my SSDI if the SS ADMIN does this and pay him off in a few years. Now if I arrange this with S.S. if even possible who pays for my deducted benefit and me. S.S office advised me last year to give the $$ to my son and then sue him to pay back the insurance co. That is just plain outrageous to advise.

So, in a nutshell, who gets what and who pays my insurer for payment?

I was in a contract with Mutual and Integrated benefits and all monies were to be repaid according to IBI and my disability carrier. I was told by one attorney friend that S.S does not have the right to make or force payment when monies are to be repaid to the insurance companies

Thank you and keep up the great work. It is always good to know their are still good folks in this world.

Attorney Greg Dell:

Daniel,

Most ERISA disability policies also have an offset for minor children that receive benefits as result of your disability. I have not seen your policy so I can not specifically answer your question.

Regina Moore:

I am close to getting my retroactive pay from SS. I have been contacted by lawyers that work for my LTD company. They want me to sign an Electronic Funds Transfer form so they have approval to take the money as soon as I deposit it. They want all banking info. I have heard of LTD companies getting all the retroactive pay and then cancelling the LTD policy. I read over the letter that stated I am approved through them until the year 2044, but they stated right after that saying, “UNLESS REVIEWED BY OUR HEALTH EXAMINERS THAT YOU ARE NO LONGER DISABLED”. I feel as though they are trying to be sneaky and trick me. I want it in writing from them of what I expect and then we will negotiate $. Not being ugly but, I think 2 can play this game.

Attorney Greg Dell:

Regina,

I have rarely ever heard that you are required to sign an ETF for your SSDI funds. You should demand this requirement in writing to verify if it is true.

Gary Parker:

My wife, who went on LTD in 2010 through a LTD insurance policy, finally won her case with the SSA in 2012. She received a check from the SSA for back pay in late December 2012 and was required to send the proceeds to the insurer.

The problem: although she immediately wrote and mailed a check to the insurer the same day that she received the SSA check, the insurer did not post it until early January 2013. So both the SSA and the insurer are showing on their respective 2012 tax year SSA-1099 and W-2 that my wife received pay, without showing the credit to the insurer, effectively resulting in $30,000 that she did not receive benefit of. The insurer indicated they will show it on her 2013 W-2. But that means we’ll have to pay tax on the $30K now. I don’t know if we would be allowed to deduct the net credit — the insurer benefits that will be paid in 2013 will be less than the reimbursement they received from SSA — on our 2013 tax year return. I’m sure this has probably happened to others. What can we do about this “timing” situation? Thanks!

Attorney Greg Dell:

Gary,

We are not accountants, but you can report the income in a manner that works best for you and provide a reasonable explanation to the IRS if they ask. You should ask an accountant for an official opinion. You should send a letter to the disability carrier explaining the problem with what they did to your wife as back you for yourself.

Chad V.:

I became disabled in 2010. The Hartford paid me LTD as per the policy – 60% of my wages. When there 2 year “decision” period came in early 2012 they approved me as totally disabled and able to receive benefits until age 65. I applied for (as per the policy) for SS and was approved as of Dec 2012 at age 35. They sent me a bill for a $37,500 overpayment which I paid them right away. Then in Feb 2013 I received another letter saying I own them $20,700 for another overpayment for my son (now 15).

Now I understand if the money is coming into the household they reduce your benefits… bla bla, it’s BS but it is in the paperwork. Here is my complaint, I do not have custody of my son, my ex-wife does. I get him 35% of the time (Oregon overnight caculations). She received a lump sum payment of $27,500 and also receives $873 per month due to my disability. The Hartford has sent me a letter stating they are reducing my benefits by $873 per month and oh yea I need to pay them $20,500 in overpayments for him before they will start giving me my $764 a month again.

They never helped me pay for a single thing for him for the 3 years I was waiting for SSDI to kick in. I don’t have custody, file him on my taxes, and due to HIPPA laws Social Security can’t even tell me who they’re paying the money to for him!

Now I know it’s going to his mother and it will be a cold day in h*** before she would pay them back. Furthermore why should she? I am just seeing what you think of this situation. How can they take all this from me? I don’t have another $20,700 to give them, I gave them everything I had for MY overpayment. As it stands now I receive $1644 after medical deductions from SSDI and if I am stuck with this $874 deduction per month AND have to pay back the $20,700 his mother received (that they spend on nice trips and car etc.) I am paying app. $1650 per month for 1 child. I PAY MORE THAN 50% of my income to his mother! It has left me unable to take care of myself let alone my son the 35% of the time I do have him… HELP!

P.S.

Is this a good case to just go for a lump sum payment? If you take the $873×39 months left paying my son and the $20,700 overpayment for a total of $54,747 in deductions they would still pay me (if my math is correct) $505,752 over the life of the policy.

Attorney Greg Dell:

Chad,

You may be a candidate for a Hartford disability buyout, but whether it is a good case for a buyout depends on numerous factors. Please watch our videos discussing lump sum buyouts here and here. Please call us if you would like to discuss your options.

Zack Taylor:

I was receiving long term disability for exactly two years. The company stopped paying me in December. In January, one month after I stopped receiving payments from them, I was awarded SSDI. I received a lump sum payment from Social Security in January. Am I required to turn over the lump sum to the disability company?

Attorney Greg Dell:

Zack,

Technically, the LTD company could seek reimbursement from you, but if you are no longer dealing with them, then the chances of them ever contacting you again are slim to none. If you plan to seek more benefits from the disability company, then they will definitely seek an overpayment.

Moore:

I was awarded SSDI last year, dating back to 2010. My LTD required me to apply and was approved with no issue. I understand the overpayment for myself is to be signed over to my LTD carrier but my daughter is disabled as well. No where in the policy with Assurant does it state they can collect on a disabled dependent. They are now trying to collect on her and we do not have the money as we used it for medical, living, therapy care for her. What are some options? Thank you.

Attorney Stephen Jessup:

Moore,

If the SSA did not award disability benefits to your dependent child due to your disability, then Assurant may have no right to the benefit. If your daughter receives primary SSDI (not associated with yours) then under those circumstances it is unclear how they could assert the offset. Please note that a majority of employer provided disability policies do allow for a carrier to collect for an overpayment to a dependent receiving SSDI benefits on account of your disability.

Christine:

Hi,

My husband receives LTD benefits from MetLife and now they found out about our son’s child social security disability check that comes in my name, not his. His employer’s LTD coverage states that depending on your personal circumstances, the benefits you may receive from sources other that the LTD coverage may significantly reduce any benefit that the company’s LTD coverage might provide. It doesn’t state anything about child’s social security payments. Now they are claiming an overpayment because of this, can they win this in court?

Attorney Stephen Jessup:

Christine,

Yes. Most disability policies indicate Primary Social Security and Dependent Social Security (child in this case) awarded attributed to the disability of a parent are offsets under the policy. From the sound of it, you only have an information brochure from the employer as to the policy and not the actual plan document. Request a copy from the employer for full detail. If the policy allows for the offset for dependent Social Security, then MetLife is entitled to recollect overpayment and offset the benefit.

Bill:

Hello,

I’m currently on SSDI. I received and over payment check from Social Security that I’m going to remit back to my LTD carrier. The problem is that the check from SS if about 1K less than what my LTD carrier is asking for. I have no problem giving the money back to my LTD carrier. But why would I be expected to remit more than I received from SSDI?

Thanks!!

Attorney Stephen Jessup:

Bill,

Contact your carrier to get clarification as to how they are determining the overpayment amount. You’re right- they can’t take something you didn’t receive.

Hiking2007:

I have been receiving LTD through Hartford for almost 3 years when they terminated me several months ago. Have SS hearing soon and if awarded do I have to pay Hartford back the back pay that I would receive.

Attorney Stephen Jessup:

Hiking,

If the policy indicates SSDI as an offset then you do have an obligation to repay the money received. Whether Hartford finds out about the SSDI award or you do in fact pay them back is another matter.

Mona:

My LTD company stated that to them I am no longer disabled and stopped payments in August 2012 after 2 years. I was awarded SSI in September 2012.

I have a few questions:

How can they say I am not disabled and no longer pay me when SSI has awarded me disability?

Since they are not paying me anymore, do I have to pay them back?

And no where on any paperwork did it state anything about my childs payment. When I call and ask what I owe, I am told that they don’t know yet. If I am no longer a client, why do I owe them?

Attorney Stephen Jessup:

Mona,

I will respond to your questions in order.

(1) Receipt of SSDI benefits is not a guarantee that you will receive benefits under a private/group disability policy, but it does constitute strong evidence of disability that the carrier must consider. From your comment I assume you did not appeal the decision denying your benefits, but if you had, providing the SSDI information would have been helpful.

(2) If your policy indicates that any amount received is subject to offset, then you would be responsible to refund any SSDI funds that correspond to any period of disability the company was paying you benefits for.

BMOSS:

Can a LTD company ask more from you in an overpayment that was given to you by Social Security?

Attorney Stephen Jessup:

Bmoss,

The carrier is only entitled to receive as repayment of an overpayment any monies actually received by you from the SSA. They should not be entitled to any portion of a lump sum back benefit check from the SSA that was apportioned to an attorney as a fee.

Bob:

I have been receiving LTD from Liberty Mutual through my employer. The plan summary and description states they would offset any SSDI that “you” receive but Liberty is saying that “you” includes spouse and children. If my employer didn’t pay me based on my family or the amount of money they needed how can Liberty Mutual say they can. I’m sure that my employer hasn’t kept up the plan documents as they should have and that is what it may have been in the past but when I filed I closely reviewed the plan description and summary posted on our benefits website. It also states that if I’m denied in whole or in part and file a legal recourse and am successful that they will pay what the judge says the legal fees should be. I just was approved for SSDI 2 weeks ago and am afraid that Liberty will begin reducing my monthly benefit from them for both my amount my sons, and spouse even though we haven’t applied for them yet. What do I do? Thank you.

Attorney Stephen Jessup:

Bob,

It is not uncommon for a group disability policy to indicate dependent SSDI benefits as a source of “Other Income” and offset your benefit by same. You will need to obtain a copy of your policy and review the section that refers to “Other Income.” If it does indicate that dependent SSDI is an offset then Liberty Mutual will be able to offset your benefit by the amount received. Liberty will most likely require you to apply for the dependent benefit.

With respect to paying “what the judge says the legal fees should be”- under ERISA the only time attorney’s fees will be paid is if you prevail at trial and then on separate motion to the court the judge awards attorney’s fees.

Gary M.:

I am disabled from a heart transplant back in 1993 and receive Social Security Disability plus a benefit for my child who turned 18 back in August 2013 and will graduate high school in May 2014 at which time his benefit will end. I also receive monthly benefits from MetLife and Mass Mutual private disability insurance policies on top of my Social Security. In May 2014 when the Social Security benefit drops (by approx $850.00) will this cause either or both of my private insurance disability policies to increase by that amount?

If Social Security is now paying me less than they were, then wouldn’t the disability companies need to make up that difference?

I have filled out forms over the past many years indicating my Social Security income including the child amount and so their offsets should have been calculated and deducted from what they’ve been paying me.

Thank you!

Best regards,
Gary

Attorney Greg Dell:

Gary,

You are correct. Once you stop receiving benefits for your dependent child, then either MetLife or Mass Mutual should start paying you more money each month. Also, they can only deduct the actual amount you receive from SSDI.

Terry:

Sir since SSDI deducts money for Medicare and you have no choice in this deduction, should a LTD insurance company still recieve an offset credit for this payment? Thanks. Terry

Attorney Stephen Jessup:

Terry,

More often than not the language of the policy is any money received from the SSA is an offset, which the insurance company reads to mean the total amount regardless of deductions for Medicare or taxes. The only exception is an attorney fee award paid out to an attorney who helped secure your benefit.

Nancy U:

My son turned 18 yrs just 2 weeks after a disabling injury I received in May 2011. He has been disabled since birth, we had registered him at age 10 with Social Security Disability but they stated as long as both parents were working there was no benefit. I was told at that time by Social Security personnel that my son would need to re-apply when he turned 18 years of age for his disability… So, after my injury, it took a very long time to get Social Security to approve my disability, which they did in July 2012. Even though my son applied when he turned 18, the letter from Social Security states that he needed to now apply for benefits and that if awarded, they would use July 2012 as his effective date.

The Social Security packets/info explain that if you are under the age of 22 and your parent is legally disabled, that you qualify for Social Security Disability and he can also apply for Medicare. When my son turned 18, I was 2 weeks into my disabling injury and since Social Security awarded me in full, I feel he should have retro back to his 18th birthday if awarded (we are appealing a denial ourselves). He applied within the timeline to retro to his birthday. Otherwise, the government is getting advantage by denying viable claims of people with disabled children over 18. They benefit by their denials, and could be interpreted as deliberate denials of my benefits so they could delay the start of his benefits as long as possible. My son’s denial said that although their doctor found he was unable to work, they have determined he can do menial work (which is impossible for him).

Is this possible? Should they not retro his benefits to age 18 (May 2011) if awarded? Or can they use the date they finally decided to award me benefits July ’12? (after a hearing – I have had 3 spinal surgeries for thoracic burst fracture and just had 7 level spinal fusion again 2 months ago).

Attorney Stephen Jessup:

Nancy,

You will need to consult with an attorney specializing in Social Security Disability as to your questions regarding your son’s case.

Michael:

I received LTD for two years then it stopped. I have had no income for almost a year now. I just had my SSDI hearing and my attorney said it was approved. We are waiting for the approval letter to see if it will be Fully Favorable or not. I was wondering, if I am approved for a lower monthly rate than what LTD paid us, can they still take some of the back pay for the year that they didn’t pay for me to offset the difference? Also my LTD carrier paid my monthly child support obligation. Will they require me to pay them any lump sum my ex may receive? I have read some of your questions and frankly they scare me! My ex wife will pocket any lump sum she receives and leave me to hang if I am required to pay her portion too.

Attorney Stephen Jessup:

Michael,

Depending on when the SSA determines your date of disability to be, there might not be an overpayment. If your carrier has not been paying you benefits for over a year due to a claim denial, or cessation of benefits due to a limitation in the policy, then they would have no right to any overpayment repayment for that time. Your carrier could, however, be entitled to recovery of and SSDI and dependent SSDI awarded during any time that overlaps with a period in which they were paying benefits.

Liz:

If a child is born with a disabling syndrome, he needs 24/7 care, feeding tube, does not walk or talk or communicate, needs medications, has had 3 open heart surgeries, can he not receive disability benefits because both parents work? Parents both work to put food on the table for the family and their other child. I am shocked that they get no help.

Attorney Stephen Jessup:

Liz,

You would have to contact the Social Security Administration or a Social Security Attorney to determine if there are any benefits that could be received on account of your child’s condition.

Bob:

Hi Stephen,

We talked a while back about Liberty Mutual and the offset they want to make for benefits my wife and son might receive. I have just one quick question: do I have a suit against my employer for stating that our LTD was 70% of my income? If I want to get a mortgage or loan like I have in the past on my own the bank and mortgage company won’t let me use my wife or sons SSDI benefit. I may be damaged very soon because I would possibly like to purchase a different home and by that time my wife and son would be receiving SSDI.

Thank you again for all your help. You’re the best!

Bob

Attorney Stephen Jessup:

Bob,

I don’t know if you would have any enforceable action against the employer. The language of the policies are usually written in a way that indicates you would be eligible to a percentage of your pre-disability earnings subject to any other terms and conditions in the policy.

Bob:

Thanks for the reply Stephen.

I have gone over the SPD in detail and don’t see where it makes any reference to a “policy” and we were always told we were self insured so I relied on the information posted on our benefits web site to make family decisions and would have purchased additional private coverage to assure my family was taken care of had I known they had to give up any benefit “they” received. I had no knowledge of a policy that should have been reviewed nor was one available.

Again the issue is the bank or mortgage company won’t consider their SSDI benefit amount so now I’m left use only what “I” receive which is less than the 60% company provided LTD and the 10% additional coverage I purchased so I feel I have been damaged and my ability to obtain credit amounts has been reduced due receiving <70% of my pee-disability income.

I'm still having a problem that the benefit ends when I die and my wife and son who gave up the SSDI will only have that. Doesn't seem right especially because they would get their SSDI whether or not I had LTD coverage.

Thanks again for all your guidance on this issue. I'm not sure I'm ready to give up and roll over yet though :)

Bob

Attorney Stephen Jessup:

Bob,

I wish you the best of luck in your fight. With respect to the lack of a right to survivorship in your LTD policy, I would also check with your company to see if there is also has a sponsored Life Insurance plan for you.

Rob:

What is sad about all of this are the years of paying PREMIUMS to companies like UNUM only to get slapped in the face when your SSDI is approved when they ask for the retro payments to be paid back to them. Its funny how the Federal Government is allowing this to go on and I can’t believe King Obama did “add” to the ACA he signed like other fats he and his party had added to it before he signed off on it. If a person pays PREMIUMS then its an INSURANCE but in these LTD cases its really not an insurance but more of a “We will lend you this amount for this many years, interest free, blah, blah”…In all reality that is all it is and companies like Unum keeps making billions on the PREMIUMS they receive each and every week, bi-weekly and month from people. LTD is good but its an insurance like if you die or get injured. Once it happens then you should be paid as like the rest of the insurance payouts without having to pay it back. Really think about it, those of use who don’t make much in the first place only get 60% or 80% (One of those two) of our wages in the first place and should be paid more because we are actually UNDERPAID in the first place if we have children. Yes UNUM will never take more than what they owe you, its written in all their policies from my understanding, but they do not consider that your being under paid causes bills to and problems later on. So a person now has to make a choice, pay their bills or pay UNUM back the so called SSDI Overpayment. What would be smart for a person to do is to tell the Judge you request that if a decision is made FULLY FAVORABLE only to disable back a maybe a month before the decision for payment purposes only. This way UNUM won’t get NOTHING. If people did this then maybe these LTD corporations will start crying to Congress and we can finally get a TRUE overhaul of the scams they are doing. BTW I think I posted somewhere else on here that I don’t see how Unum can count every known income to man as wages but NOT VA Compensation. Even if your child works to earn funds for him or herself UNUM will want you to add that as part of YOUR earnings. Crazy stuff. I am still in a toss up if I am going to pay UNUM back my SSDI Retro I have siting in the back right now in a different account. I just don’t know just yet…I might give them half but not all of it.

Attorney Stephen Jessup:

Rob,

As indicated in your previous post, Unum is lawfully entitled to repayment of the funds. As unfair as it may seem, the provision in your policy is completely enforceable. When Congress enacted ERISA in 1974 the insurance industry agreed to provide highly affordable insurance coverage to create an insured workforce. In offering policies at such a low premium rate the insurance companies required certain concessions, to include offset provisions.

Chris:

If the child is 18 years old can Unum deduct child benefits based on the child’s own disability?

John:

Hey Steve,

I’m on LTD thru my work and receiving 70% of my pay. Can the offset change since SSDI gave an increase, in the past 2 years for cost of living? Or can I receive the amount that my company received for their yearly cost of living raise. Just asking (don’t know), would it change? What should you report or tell them if they ask what you receive from the start or what SSDI is paying with the cost of living raise now? How does it work and shouldn’t they know what the gov’t gave us for the cost of living and automatically deduct the differents from year to year?

Attorney Stephen Jessup:

Chris,

The carrier should only be allowed to reduce your benefit for dependent SSDI based on an award the child received on account of your disability.

Attorney Stephen Jessup:

John,

Most policies are written that the carrier cannot offset your benefit for any COLA increase to your SSDI benefit, and can only offset the benefit by the amount initially awarded by the SSA.

John:

One question that hasn’t been specifically voiced: My wife received disability checks from Pridential. The policy was signed onto in CA, and she became disabled (MS) in CA in about 2004. She was awarded SSDI and the prudential payment was adjusted accordingly and COLA increases to her SSDI have no affect.

Well, in 2012 she had twins. SSDI began paying 25% of her benefit to each, and Prudential reduced their payment accordingly. I understand they have the right to offset based on SSDI at the time of SSDI award, including auxiliary SSDI payments.

But shouldn’t Cal. Ins. Code §10127.1, which states that no offset to can be made as SSDI ncreases over time, preclude Prudential from reducing payment for this SSDI increase that happened 8 years after the initial award?

Attorney Stephen Jessup:

John,

If your wife’s policy is governed by ERISA, then most likely any state law claims would pre-empted by ERISA. If the dependent SSDI is an enumerated offset under the policy Prudential would be allowed to offset for same.

Rob:

Here is a good one. I was approved for SSDI back in January 2014. Unum is now telling me that I MUST add my dependents to SSDI. I am thinking they want the back payments on them. Well they are NOT going to get these back payments whatsoever because when I was approved and they sent me that offset form I called Unum and talked to the person who approved my LTD. Well I put him on speaker phone and my wife is a witness to this. I asked if Unum will request the back payments of my dependents and his answer was exactly “We do not mess with dependent retro payments”.

1. Is it legal for Unum to write in a letter to me telling me that if I don’t add my dependents they will automatically add them to the offset and request these funds anyway? Unum cannot and will not force me to add dependents to my SSDI if I don’t want to. I am a 100% disabled veteran and Unum already wants every bit of my own back payment from SSDI and because this one guy who said they don’t touch the dependent payments we will have to take this up in court. I am wondering if Unum records their conversations? I sure would like to find out.

Attorney Stephen Jessup:

Rob,

The overwhelming majority of ERISA governed disability policies allow for the offset of your benefit by dependent SSDI benefits. If your policy states that the DSSDI benefits are in fact an offset, then they could seek a repayment of any overpayment on account of same.

Joe:

Hello Greg, I do not see any complaints of using pensions on top of SSDI to offset Hartfords cost. Has your firm had any cases like this?

Attorney Greg Dell:

Joe,

Yes, we have handled cases where SSDI and Pension benefits offset the monthly benefit. It all goes back to the language contained in the policy as it relates to applicable “Other Income” offsets. If the Pension plan is an enumerated offset, then the carrier can offset for same.

JOHN:

Yes Steve if Im getting ssdi,ltd,and a small pention from the company that im getting ltd from, can they offset a pention from a past employee that I worked for before I went on disability. or is the pention seprate from the company that I went out on with my diability. Can they offset both pentions while im still getting 60% of my ltd till im 65. PLUS SSDI OFFSET.

Attorney Stephen Jessup:

John,

Usually the offset for an employer provided pension is limited to the employer you were working for at the time of disability. Review your policy, as often it clearly establishes that pension/retirement from a former employer is not a source of Other Income.

Steve:

Hi,

I receive SSDI and also get LTD from a private insurance company, which pays me 60% of my salary, minus the offset amount I receive from SSDI. I recently had a child, and the private insurance company is now saying I should apply my child for disability benefits on my behalf being a parent with a disability with social security. This in turn would reduce my benefit I receive from my private insurance, another offset, I believe? Is this correct? Also am I required to even apply my child or can I leave everything as is, which is my child not to receive benefits from the gov. SSDI program?

Attorney Stephen Jessup:

Steve,

Many ERISA disability policies allow for the offset of your benefit by SSDI and Dependent SSDI (DSSDI), which are benefits paid to your dependent on account of your disability. If your policy contains such language, then they can reduce your benefit by DSSDI. Additionally, ERISA policies typically require application for any sources of Other Income (to include DSSDI) and failure to do so can result in the carrier being allowed to estimate the amount that would be received and reduce your benefit accordingly. You will need to review your policy with respect to the language contained in the “Other Income” provisions.

Lynn:

LTD plans recoup all overpayments. My question, you can file taxes on LTD benefits; when you return the money to the LTD company you have no longer recieved ltd but now SS. SS is not an earned income like LTD. What does the LTD company recouping overpayment do to one’s taxes if anything?

Ken:

My LTD policy states in definitions CHILD (ren) means a minor related by blood, marriage, or court order that can be claimed as a dependent for federal income tax purposes. I am divorced, my ex wife as the custodial parent is entitled to the dependent claim, and will receive back payment and benefits my son is entitled to. Can the Long Term Carrier actually offset my son’s benefits considering the language of the definition “can be claimed as a dependent for federal income tax purposes”? He can not be claimed as a dependent by me so that would seem to indicate the test as defined is not met and therefore and offset can not be claimed. The Insurance Analyst state my ex could voluntarily alternate the dependent claim and could hand over the back payment money… that sounds like a bunch of non-sense to me. Thank you for your help in advance on answering my question.

Attorney Stephen Jessup:

Lynn,

You will have to consult with a tax professional as to your questions.

Attorney Stephen Jessup:

Ken,

Unfortunately, I do not have an answer for you. The line “can be claimed” is open to interpretation, and if your policy has a discretionary clause allowing the carrier to interpret the terms and conditions of the policy you could be out of luck on the matter. Your child “can be claimed” on federal tax returns as is the case sometimes with shared custody or divorce agreements that set forth which party can claim a child on tax filings. I would suggest you write to your insurance carrier explaining you situation to see what they write back. Until their position is committed to writing, any assistance that could be provided is based on conjecture.

Audrey:

If I don’t pay back Sunlife the SS “overpayment”, but instead they take my monthly LTD checks until they re coup the money, can they still send me to collections? I’d be “paying them back” over $1300 per month. This is of course assuming that they continue benefits.

Attorney Stephen Jessup:

Audrey,

If there is an agreement between you and Sun Life as to the repayment, then most likely they would not send you to collections.

Donna:

I am receiving LTD from Unum and just received a letter asking for my award letters of both my disability pension from the place of employment where I purchased my Unum policy and SSD.

The letter states “if you are awarded or are entitled to receive ssd I/trs/pers benefits your disability benefit will be reduced by the amount of your monthly retirement benefit when your benefits have been paid for 12 months or as September 12, 2014. If benefits have been Awarded please provide copies of the award letters”.

I have been receiving a disability retirement from my employer effective December 30, 2013.

And I have been denied SSDI.

Question:

Can unum make me file an appeal for SSDI?

Does the quoted statement above mean after 12mos or September 12,2014 is the time my benefits will start To be reduced by my retirement?

Or will I have back payments due?

Also they included a ” benefits payment option” requesting me to give all bank info to grant unum an equitable lien by agreement in an amount equal to the overpayment estimation will occur if I make a specific request to unum or if I fail to sign the form.

Attorney Stephen Jessup:

Donna,

Under the majority of ERISA governed long term disability policies you have a duty to appeal the SSDI denial and failure to do so could result in Unum estimating what you would have received and reducing your benefit by same. I am not familiar with the quoted language and would need to see it as written in the policy itself.

Shawn Hofferth Esquivel:

I am currently receiving LTD benefits for the past two years, I just received my approval from SSDI after two and a half years. I am appalled that anyone that has paid for LTD premiums through their employer should have to repay any overpayment by SSDI and here’s why. LTD Insurance Companies are guilty by “omission” on so many levels. When I signed up for LTD benefits while working fourteen years ago, I was not given a “policy” or “booklet” or anything of the sort to tell me what I was paying for. I was able to choose whether I wanted to pay a premium based on 50% or 60% of my salary, I chose 60%. We were not told that we had to be “without” income for six months before applying and collecting for this benefit. I along with other employees signed up for LTD benefits (with little information provided through the employer or LTD Co.) because that is what responsible adults do to protect themselves. I called the LTD Company requesting a copy of my policy (before I was even disabled) and their representative asked if I was applying for benefits and I told them “no” I just want to know what my policy states. I was told that when/if I become disabled they will send me a copy. There were other problems also but Long story short….. We employees sign up for LTD through our employers, we pay these benefits through every paycheck for years, we then become disabled to find out we have to be without any earned income for six months before applying for and/or for collecting, and after the six month waiting period, then you are at the LTD’s mercy to wait to see if approved through them, (even with your physician statement stating you cannot work ) they make you sign a reimbursement agreement to pay back any SSDI overpayment for you AND YOUR DEPENDANTS to them under “emotional and physical Duress” yes, I said it “Duress.” You are so physically or emotionally ill, no money coming in, you are DESPERATE and sign whatever they “require” you to sign before moving on with your claim. There has to be something so incredibly illegal about that! What an LTD plan is, is nothing short of an unknown “loan program” for unsuspecting employees that is a hit and miss of “will I get paid or not” based on the LTD’s “opinion” if you are disabled or not! remember most LTD policies whenever they do agree to eventually hand over your policy benefit handbook to you state “they do not base their decisions on social security rules of disability!” So employees pay “premiums” for years and then we are responsible for paying these LTD’s back, are you kidding me. It is no different than me paying premiums out of my payroll check for extra life insurance and when I pass away, the Life Insurance Co cannot legally ask for my Life Ins money to be refunded back to them just because I have more Life Insurance policies in my name I’ve paid for! LTD Companies are no doubt guilty of illegal acts through “omission of information upon signing up for a policy through an employer”. I, for one, am ready to start a class action lawsuit to get back what is legally ours as working class citizens. So Attorney Greg Dell, with all due respect, do we citizens have a case?

Attorney Stephen Jessup:

Shawn,

A disability claim is always dictated by the terms and conditions of the policy. Unfortunately, the courts have determined many times over that offsets for SSDI are quite legal. The only way to avoid such provisions is by purchasing an individual policy from an insurance agent, but individual policies come with premiums that many people cannot afford.

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