Can You Work Part-Time and Still Receive LTD Benefits?

If you are receiving long-term disability (LTD) benefits, you might consider returning to work part-time to test your abilities or supplement your income. While this is a positive step, it’s crucial to understand how working can affect your benefits. Navigating your policy’s rules is key to avoiding a sudden termination of the financial support you rely on.

Here are the key points to consider:

• Review Your Policy: Your LTD insurance policy is the ultimate guide. It will define how and if you can earn income while receiving benefits.
• Potential Benefit Reduction: Most policies will reduce your LTD payment based on the income you earn.
• “Own Occupation” vs. “Any Occupation”: The rules for working part-time often change depending on your policy’s definition of disability.
• Communicate with Your Insurer: You must report any work activity and income to your insurance provider to avoid jeopardizing your claim.

How Does Part-Time Work Affect My LTD Benefits?

Most group disability policies encourage a return to work and have specific provisions that outline how it’s handled. Typically, your ability to work part-time without losing all your benefits depends on a “partial” or “residual” disability clause.

Under such a clause, if you work part-time but earn less than a certain percentage of your pre-disability income (often 80%), you may receive a partial benefit. The formula for calculating this benefit varies. Some policies use a simple offset, reducing your LTD payment by a portion of your new earnings. Others calculate a proportional benefit based on your percentage of lost income. It’s essential to understand your specific policy’s formula to predict the financial impact.

What Is the Difference Between “Own Occupation” and “Any Occupation”?

The definition of disability in your policy plays a major role.

• Own Occupation: During this period (usually the first 24 months), your benefits are based on your inability to perform the duties of your specific job. Working in a different part-time job might be allowed, but your earnings will likely still offset your benefits.
• Any Occupation: After the initial period, the definition often shifts to your inability to perform any job for which you are reasonably qualified. Working part-time in any capacity during this phase is riskier, as the insurer could argue it proves you are capable of “substantial gainful activity” and terminate your benefits.

What Should I Report to My Insurer?

Transparency is non-negotiable. You must inform your insurance company before you start any work, no matter how minimal. You will need to report:

• The name of the employer.
• Your job title and duties.
• The number of hours you work each week.
• Your gross monthly earnings.

Failing to report work activity can be considered fraud, which could lead to a permanent loss of benefits and legal trouble. Always communicate with your insurer in writing and keep a copy for your records.

Your Success Is Our Priority

Returning to work while on LTD is a complex decision with significant financial implications. The rules are designed to be confusing, and a misstep can cost you the benefits you need. Before you take on any part-time work, it is vital to have a clear strategy.

At Bartolic Law, we can review your policy, explain the specific risks and opportunities, and help you communicate with your insurer to protect your benefits. If you are considering a return to work, contact us for a consultation. Let our team provide the guidance you need to move forward.