How SSDI and Private Disability Work Together

1. SSDI Benefits

• Paid by the federal government.
• Based on your work history and the Social Security taxes you’ve paid.
• The amount is determined by your earnings record, not your current financial need.

2. Private Disability Benefits

• Paid by an insurance company, often through an employer-provided plan or a policy you purchased yourself.
• Designed to replace a percentage of your income if you’re unable to work due to a disability.

3. Combining Benefits

• You can legally receive both at the same time.
• Most private insurers will subtract your SSDI amount from what they owe you so that your total monthly benefit remains within a set limit—often 60%–70% of your pre-disability income.

Example of Payment Offsets

If your private disability benefit is $2,000 per month and you start receiving $1,200 from SSDI, your insurance company might reduce your private benefit to $800 to keep your total at $2,000.

Why It’s Important to Apply for SSDI Even If You Have Private Disability

• Private policies often require it: Many insurance companies require you to apply for SSDI to keep receiving benefits.
• SSDI provides additional protections: Such as Medicare eligibility after 24 months of SSDI payments.
• You keep your private policy coverage: Even if your SSDI amount causes a reduction, you still benefit from the combined income.

Tips for Managing Both Benefits

• Review your policy carefully to understand how offsets work.
• Report your SSDI approval immediately to your private insurer to avoid overpayments.
• Keep records of all benefit payments from both sources for tax and compliance purposes.
• Consult a lawyer if your insurer applies offsets incorrectly or denies benefits without cause.