It depends on the long-term liability insurance policy agreement. If you have a copy of it, it is likely that you will find a clause in the policy requiring the recipient to file for Social Security benefits and to pay back the benefits received from them on approval of your Social Security claim. This is very common.
However, you may only be required to pay back the portion paid to you by your Social Security benefits. For example, if you received $2000 per month from the private insurer and Social Security pays you $1800 per month, then $200 might not be eligible for pay back. In fact, you may be able to continue to get that $200 per month from the private insurer.
The bottom line is review your private insurance policy for the details. From the facts you have provided, it seems that the payback clause is in the policy.
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My colleague is correct. Almost all LTD companies now include in their policy a provision thatsays if you get Social Security benefits, you are required to repay the LTD company the amount they paid you (less any attorney fees). Some companies also want back any money paid to your kids if your benefits do not fully reimburse them!
Get a copy of your policy and then work out a payment arrangement. Otherwise, you will end up in the middle of a lawsuit. And, while SS benefits are not attachable, the LTD company could end up taking your home or other possessions if they win the suit.
Sorry for the bad news.
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I agree with the answers given by the other attorneys. Here's how they claim you're "overpaid." Most long term disability policies pay 60% of what you made before you became disabled. For example, if you made $40,000 per year before, or $3333 per month, your monthly LTD benefit, before any offsets from things like Social Security kick in, is $2,000 per month, under most policies.
So, you become disabled, and after a 3-6 month waiting period, LTD starts paying $2,000 per month. You apply for Social Security, but they turn you down, you have to do a bunch of appeals, eventually you get a hearing, and you win. Social Security owes you a bunch of back pay. The back pay applies to the months you already got paid LTD. Let's say your Social Security benefit is $1,000 per month, and there's a year of back pay. That's 12 months where the LTD carrier paid you $2,000 per month, but they only SHOULD have paid you $1,000 per month ($2,000 LTD payment minus $1,000 SSDI payment = $1,000). That's why they say you got "overpaid." It has nothing to do with getting "too much" Social Security money, it has to do with getting "too much" LTD money. Under this example, the LTD company would ask for $12,000 from you.
I hope the answers you got help. One more thing - if you refuse to pay back (or can't pay back) the LTD carrier, the policy may give them the right to cut you off entirely, so you wouldn't continue to receive the $1,000 per month anymore (under the example above, anyway), AND you would still owe them the "overpayment." Be careful, get a copy of your LTD policy if you don't have one, and certainly talk to a lawyer in person if you're not sure what to do.
Jeremy Bordelon is a licensed attorney in the State of Tennessee only, and is authorized to practice in all Tennessee State and Federal courts, and before the Social Security Administration in any jurisdiction. Please call our firm at 1-866-959-5362 if you would like to discuss your case in more detail. The answers provided on Avvo.com are for information purposes only, and should not be relied on as legal advice. This answer does not create an attorney-client relationship between us. In some jurisdictions, this answer may be construed as attorney advertising.