Most long term disabiity contracts have a clause which "offsets" LTD benefits by any social security received. They cannot garnish your social security benefits, but they could terminate your LTD benefits and that may have a terrible effect on your income. Many LTD carriers are offering "buyouts" to individuals -- where they pay them a lump sum based upon the amount of benefits they receive and their life expectancy. You may wish to consult a social security attorney who is experienced in dealing with LTD benefits. One way to find a law firm what works in that area is to consult with the National Organization of Social Security Claimants & Representatives.
Most LTD policies do include "fine print" stipulating reimbursement of the benefits, or some portion of them, for any overlapping months if the beneficiary is later found eligible for SS disability.
Unfortunately, I have had a few clients go through this experience. I always advise my clients to check their policy or contact the insurer before spending any of the past-due benefit lump sum check.
Of course, then you ask, "Then, why bother applying for SS disability?" The usual answer is that it is required by the LTD carrier. The up side? It's generally easier and much quicker to get your LTD benefits than to get SS disability.
I would suggest contacting the carrier to inquire about a hardship waiver, settlement or repayment plan.
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