What You Should Know About Working While on Long Term Disability
If you’re considering returning to work, you should know that working while on long term disability could put your benefits at risk. This is especially true if you’ll be earning as much as (or close to) what you were earning before your disability. But can you work while on disability and still collect benefits? Yes, but it depends on what type of LTD policy you have. It’s important to understand the specifics of your LTD policy in order to know for sure.
Working While on Long Term Disability Under “Own Occupation” Policies
Can you work while on disability under an “own occupation” policy? These LTD policies are generally more flexible in allowing policy holders to work than “any occupation” policies. If you’re on disability under an “own occupation” (“own occ”) policy, you can perform part-time or sometimes full-time work. However, the new work must be different than the one you got injured doing.
“Own occ” policies define disability as being unable to perform the “substantial and material” duties of your chosen occupation due to medical reasons. So, construction workers who are now unable to lift and carry construction materials are disabled under an “own occ” policy. This is the case even if the workers could work in a job that is not as physically demanding.
Though LTD policies allow you to work on disability in another profession, there are certain limits. Three common ones are:
Limits on Amount
Some policies cap the amount of disability benefits you can receive if you work in another occupation. For example, your policy could state that your benefits will expire if the wages from your new job meet or exceed 80% of your earnings before you were disabled.
Return to Work Incentive
Some LTD policies contain “Return to Work Incentives”. These are provisions that require your combined wages and benefits to equal your pre-disability earnings. If your benefits plus wages total to more than 100% of your pre-disability earnings, your benefits will be reduced. Some policies make this reduction in benefits only during the first year of disability. Afterwards, the reduction occurs less or not at all.
Limits on Types of Services Provided
Certain “own occ” policies further limit your ability to work while collecting disability with a “Professional Services” provision. It will expand the types of work you cannot do while on disability to those that require the same professional or occupational license. So, your disability could terminate if your new work and the job you were disabled performing require the same license.
Despite these limitations, most “own occ” policies allow you to work in another profession without the loss of disability benefits. These three provisions are recent introductions to a minority of policies.
Working While on Long Term Disability Under “Any Occupation” Policies
Can you work while on disability under an “any occupation” policy? As its name suggests, you should not be able to work in any job if you hold an “any occupation” policy. A lot of “own occ” policies transition to “any occ” after 24 months.
Under an “any occ” policy, you qualify for disability benefits because you are unable to perform any occupation. However, an “any occ” policy will allow you to work on a limited basis.
Under an “any occ” policy, your disability is likely to be reduced or eliminated the more you earn from your new job. If your new job pays 80% or more of what you earned before you became disabled, your benefits could be terminated. If you earn less than 20% of your pre-disability income, your disability is likely to remain the same.
Most “any occ” policies allow you to receive residual or partial disability for part-time work. Your benefits will be reduced in proportion to your new income if it’s 20-80% of your pre-disability earnings.
A lot of “any occ” policies also offer rehabilitation incentives. They can motivate you to get back to work by offering an extra 5-10% of monthly benefits. To receive the incentive, you will have to participate in an approved rehabilitation or job-training program.
What to Do Before Deciding to Return to Work
If you’re considering working while on long-term disability, be careful to review your policy with an experienced attorney. Your attorney should help you fully understand whether it is an “own occ” or “any occ” policy, and the implications of both. This will help you benefit from both continued disability checks and participation in meaningful work.
Can You Work While on Disability? Speak to an Experienced LTD Attorney
Boston long term disability attorney Jonathan M. Feigenbaum, Esquire can help. Contact us today.