How Temporarily Returning to Work Can Impact Your Disability Benefits

If you’re receiving disability benefits, you may wonder if trying to work again, whether to ease financial strain or test your health, might affect your benefits. While seeking employment can be empowering, it’s essential to understand how a temporary return to work could impact your long-term disability (LTD) benefits. Knowing the rules can help you avoid unintended consequences. At Bartolic Law, we help individuals understand their disability benefits and provide guidance on how to protect their rights if they return to work.

Key Scenarios and Rules to Understand

Disability insurance policies and programs, such as those governed by ERISA (Employee Retirement Income Security Act), often include provisions allowing recipients to attempt work while maintaining some level of benefits. However, the details can vary based on your insurance policy or Social Security Disability rules. Key factors that can influence your benefits include:

1. Trial Work Periods

Some LTD policies allow for a trial work period, designed to encourage you to try working without losing your benefits immediately. For instance:

• Your insurer might allow you to earn income up to a specified threshold for a limited period (often a few months).
• If your attempt at returning to work is unsuccessful due to your disability, you typically won’t risk losing your benefits.

2. Substantial Gainful Activity (SGA)

SGA is often crucial in determining if you can still receive disability benefits while working. Under Social Security rules, earning over a certain monthly amount may disqualify you from benefits. LTD insurers may have similar thresholds.

• For 2025, the SGA income limit is $1,470 for most disabilities; exceeding it might indicate your ability to engage in substantial work, potentially reducing or terminating your benefits.

3. Income Offsets

Many LTD insurance policies reduce your benefits dollar-for-dollar by the income earned from temporary work. While this means you could still work part-time, your total monthly income (benefits + wages) may not increase significantly.

What You Should Know Before Returning to Work

Before committing to temporary work, consider these key steps to safeguard your benefits:

• Review Your Policy: Understand how trial work periods, income thresholds, and offsets apply to your LTD policy specifically.
• Consult an Attorney: Speak with a disability law attorney to clarify how working might impact both your LTD and Social Security benefits.
• Track Income: Keep detailed records of all earnings to ensure you remain within policy limits.
• Request Written Clarifications: If your insurer offers unclear rules, ask for details in writing to avoid future disputes.
• Communicate Changes Promptly: Inform your insurer immediately if you decide to work, as failing to do so could lead to overpayments or accusations of fraud.

Empowering Yourself with Knowledge

Temporary work can be a powerful step toward financial independence, but it’s vital to know the implications for your disability benefits. By reviewing your policy, knowing your limits, and seeking professional guidance, you can make informed choices that align with your financial goals and health needs.

If you need assistance understanding your disability rights, Bartolic Law offers support to help you protect your benefits. Contact us today for a consultation.