Some of my clients ask if they are allowed to work while receiving long term disability insurance benefits. Of course, if you are able to return to work in your previous position, you will no longer need disability insurance benefits. Nevertheless, many of my clients who weppreviously worked long hours in demanding jobs prior to their disability and are now seeking an opportunity to be productive, if only in a limited capacity. Doctors often recommend patients recovering from an injury remain active and try to work if possible, as this often helps patients both physically and psychologically. However, will work activity during recovery negatively impact a patient’s long term disability insurance claim? In short, it depends on the specific terms of your disability insurance plan. Before deciding to return to work, you should consult with an experienced disability insurance attorney to make sure returning to work will not jeopardize your long term disability insurance benefits.

Return to Work Incentives

Most long term disability plans have a provision called a “return to work incentive.” Return to work incentives allow for disabled individuals to return to the workforce for a limited period of time without reducing or eliminating the disability insurance benefit. For example, some plans will allow disabled employees to return to work for up to a year without those earnings reducing their long term disability insurance benefits. After the work trial period, the disability insurance company may then start to reduce the benefits based on their work earnings. Some plans reduce benefits on a “dollar-for-dollar” basis while others use a formula to calculate the offset. It is important to review the particular terms of your disability plan to make sure you do not inadvertently harm your claim.

Own Occupation or Any Occupation – Your Plan’s Definition Matters

Another important consideration when deciding whether to return to work while receiving disability benefits is the definition of disability. Every disability plan is unique, but in general, most plans define disability as either the inability to perform your “own occupation” or the inability to perform “any occupation.” Depending on your plan’s definition of disability, returning to work may be allowed OR it may preclude you from receiving benefits completely.

For example, if you previously worked as a doctor, the fact that you are able to work part time at a bookstore should not impact your ability to receive disability benefits. On the other hand, if you worked as a mechanic and you are thinking of returning to work as a mechanic, this may impact your disability claim. It also likely will matter if you are earning the same or close to the same amount of money as you were prior to your disability. If the new job pays substantially less, it is less likely to impact your ability to continue to receive disability insurance benefits. Again, please consult with an expert disability insurance attorney who can review the specific terms of your disability plan.

Social Security Disability Benefits

A final consideration when returning to work while on disability benefits is whether you are receiving Social Security Disability benefits. If you are, you will want to review the Social Security Administration’s rules regarding returning to work so that you do not negatively impact both your long term disability insurance and / or Social Security Disability benefits. Similar to the return to work incentive discussed above, the Social Security Administration allows people receiving Social Security Disability benefits to return to work on a trial basis.

If you have questions regarding your long term disability insurance benefits, please contact one of our experienced long term disability attorneys.

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Bill Parsons