Disability Benefits: Who Pays for Them?

A serious injury, illness, or medical impairment could cause a major disruption to your life. You may not be able to work on a full-time basis (or even a part-time basis) as a consequence of the severity of your condition. The good news is that you may be eligible to claim disability benefits to support yourself and your family through difficult times.

This raises an important question: Who is responsible for paying for disability benefits? The answer depends on a number of different factors. If you’re covered by a voluntary LTD plan, you may be entitled to compensation through a private policy. Alternatively, you may be able to get benefits through a Social Security disability claim.

Disability Benefits: Three Common Sources of Compensation 

The source of disability compensation will depend on the nature of your coverage. You may be insured through a privately-held disability policy and/or the Social Security Disability Insurance (SSDI) program. Alternatively, you may be entitled to benefits through Supplemental Security Income (SSI) based purely on disability status and financial needs. Here are the key things to know about the three most common sources of disability benefits:

• Private Disability Insurance: Many people are covered by a short-term disability policy and/or a long-term disability policy. The Bureau of Labor Statistics (BLS) estimates that more than 40 percent of U.S. workers have some form of privately held disability coverage. If your cover is a group plan backed by your employer, then it is regulated by the federal Employee Retirement Income Security Act of 1974 (ERISA). Non-employer private disability insurance policies are generally regulated by state law. If you have any questions about making an STD or LTD claim, an experienced disability lawyer can help.
• Social Security Disability Insurance (SSDI): The SSDI program may also be responsible for paying part (or all) of your disability benefits. When you earn income (wages or self employment) in the United States, you are required to pay FICA taxes. By paying a sufficient amount of Social Security taxes into the system, you earn the work credits needed to qualify as an insured person under SSDI. A person who has a disability and who is insured can make a claim for benefits through SSDI.
• Supplemental Security Income (SSI): If you lack private disability insurance coverage and you have not earned enough work credits to be insured through SSDI, you may still be able to get Social Security disability benefits. SSI is a needs-based alternative to SSDI. You can qualify based on disability status and financial need—regardless of your lack of work history. 

The loss of earnings that come with a disability can put a tremendous financial burden on a family. It is crucial that you and your loved ones are able to access the maximum available financial support through a disability claim. If you have any questions or concerns about the types of compensation that are available in your case, an experienced Social Security disability attorney can help.