09 Nov Should I be on disability or retirement benefits?

Q. I was on disability since 1986 from my job. Now that I turned 66 in January of this year, they took me off disability and put me on retirement benefits. In the meantime, I was in the hospital and then rehab for about seven weeks. I am back to being disabled. Should I get a lawyer to help me with disability benefits again?
— Confused

A. We are sorry to hear that you continue to have issues.

It sounds as if you had a long-term disability benefit through your employer that protected you all this time.

However, most group long-term disability policies typically do not provide employees with lifetime benefits, said Matthew DeFelice, a certified financial planner with U.S. Financial Services in Fairfield.

Instead, many group long-term disability plans will pay the disabled individual benefits if they cannot perform the primary duties of their job only until a certain age, he said. In most cases these plans are designed to pay benefits up until full retirement age, he said.

“Remember, disability policies are designed to protect your income in case you become injured or sick during your working years – not your retirement years,” he said. “Once you hit 66, my guess is that you hit the maximum benefit period available in your group policy and are no longer eligible for coverage under that plan.”

Unfortunately, it does not matter whether you are still disabled, he said.

Also, he said he wouldn’t run out to spend money on a disability attorney just yet.

First, he recommends you contact the human resources or benefits department at your company and ask for specifics on the group long-term disability policy you have been covered under. You’ll want to know the conditions and terms and the maximum benefit period, and ask whether or not you are still eligible for coverage, he said. Ask them to verify what they tell you in writing. Most of the information above can be found in the group policy certificate of coverage, so you can request a copy of this document, he said.

You may qualify for Social Security disability benefits, but your age could be an issue here.

“Social Security disability benefits automatically change to retirement benefits when disability beneficiaries become full retirement age,” DeFelice said. “In most cases the law does not allow a person to receive both retirement and disability benefits on one earnings record at the same time.”

You may, however, qualify for Supplemental Security Income (SSI) if you meet the strict financial criteria while drawing either Social Security retirement or Social Security disability benefits, he said.

“Supplemental Security Income (SSI) is a Social Security program that helps seniors and those with a disability who have an extremely low income or limited assets,” he said. “To qualify for SSI, you need to meet strict income qualifications and have only a minimum amount of resources.”

“Resources” can be anything that can be turned into cash, such as bank accounts, stocks, U.S. savings bonds, land, personal property or a life insurance policy, DeFelice said

“In 2022, a person must have less than $861 a month in unearned income to receive SSI,” he said. “A couple can get SSI if they have unearned income of less than $1,281 a month in 2022.”

You can learn more about specifics of the SSI program here.

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This story was originally published on Nov. 9, 2022.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.