Three Important Things to Look Out For During Your Social Security Disability Case

Offset

There are some disability cases where your social security disability claim is combined with your worker's compensation or any other sort of claim. This will happen during a work related injury. However,, workers are not able to receive the full amount of social security benefits and worker's compensation at the same time. This is what is called an offset.

Social Security determines what is called an applicable limit or the max total monthly combined benefits the recipient is allowed to receive under federal law. If they find that the benefits exceed that max amount, it would determine where to reduce benefits to bring the amount back down to the max total allowed. This can be determined in two ways:

  • 80% of the worker's pre-injury income, called average current earnings, or 
  • The total amount of SSDI received by all of the members of the recipient's family in the first month that worker's compensation received, called the "total family benefit."

If you feel as though you are entitled to benefits from more than one entity, it could be beneficial to consult with an attorney to look at your options. A qualified attorney knows how to analyze your specific situation and go after the combination of benefits that will help you the most. This is where it is important to either have knowledge of social security, worker's compensation, and other related fields or hire an attorney that has that knowledge. 

Long Term Disability Insurer

Due to the fact that social security disability claims take a long time to settle, you will typically receive a large sum of back pay from social security shortly after your claim is approved which will cover all months you spent waiting on benefits.

Unfortunately, that money is not always yours to keep. Your Long Term Disability Insurer considers this to be money that they advanced you while you were waiting on social security to make a decision about your case. In most cases, you will have to pay this money back to your long term disability insurer immediately after you receive it. It is important that you read over all fine print before engaging with a long term disability insurer to understand their policies. Some require you to pay them back, others do not. It all depends on the insurer. This is another area where it is beneficial to have a knowledgeable attorney on your side to help you retain the largest sum of your benefits as possible.

Taxes

There are some social security disability cases where you are required to pay taxes on them. This typically happens in cases where you are receiving other incomes while receiving benefits:

  • If you file a federal tax return as an individual and your income is more than $25,000, you have to pay taxes.
  • If you file a joint return, you may have to pay taxes if you and your spouse earn more than a combined income of $32,000.
  • If you are married and file a separate return, you will have to pay taxes.

The social security administration will send you a 1099 form to fill out, which will let them know if your benefits are taxable.

Final important note: In some cases where your worker's compensation offset lowers your social security benefits, you will have to pay taxes on it.

Ben Glass
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Ben Glass is a nationally recognized Virginia injury, medical malpractice, and long-term disability attorney