Does Social Security count employer disability insurance payments as earned income?

No, disability insurance payments from your employer's policy are NOT counted as earned income for SSDI purposes. The SSA only counts actual wages from work as earned income when determining substantial gainful activity (SGA). Private disability insurance benefits are considered unearned income, similar to investments or gifts. However, be aware that most employer LTD policies require you to apply for SSDI, and if approved, your private disability payment will be reduced by the amount of your SSDI benefit. This is called an "offset" and is standard in most LTD policies.

While private disability payments aren't counted as earned income for SSDI eligibility, there's still the substantial gainful activity (SGA) limit to consider. For 2025, that's $1,550/month for non-blind individuals. As long as you're not working and earning above that amount, you should be fine from an income perspective. The bigger challenge is meeting SSA's strict medical criteria. They use a different definition of disability than private insurance companies. Many people get approved by private insurance but denied by SSA. Start gathering ALL your medical records now and consider getting a specialized attorney if you get denied initially.

totally agree with what everyone said. the SSA doesn't care about your LTD payments when deciding if your disabled. they care about if your actually working. but like someone else said, your LTD will probably get reduced if you get SSDI. mine did. read your policy!!

Just to add what others haven't mentioned - when you apply for SSDI, you'll need to report ALL income sources including your private disability insurance on the financial forms. This doesn't mean it counts against eligibility, but SSA wants a complete financial picture. Also, there's something called the 5-month waiting period for SSDI - meaning you won't get benefits for the first 5 months after your disability onset date. Since you're already 8 months in, you'd be past this if approved. And heads up - getting approved for SSDI is EXTREMELY difficult now. The approval rate at the initial application is only around 30%. I'd strongly recommend looking into legal help before you even start.

I work in HR and deal with this ALL THE TIME. Here's what happens with most employer plans: 1. You get LTD from your employer plan (your $2700/mo) 2. Your LTD insurance REQUIRES you to apply for SSDI 3. If approved for SSDI, let's say $1800/mo, your employer LTD drops to $900/mo 4. Your total income remains $2700/mo, just from two sources The insurance company saves money this way. READ YOUR POLICY CAREFULLY! Some policies even require you to pay back LTD benefits if you get SSDI backpay!

One more critical tip - when you do apply for SSDI, you'll need to call SSA to schedule an appointment. This is currently EXTREMELY difficult as they're understaffed and overwhelmed. I've had clients try for weeks to get through. I recently discovered a service called Claimyr that helps people get through to SSA quickly. It basically holds your place in line and calls you when an agent is available. Saved me hours of frustration. You can see how it works at claimyr.com or check their demo at https://youtu.be/Z-BRbJw3puU Definitely worth it considering how important this application is for your financial future.

one more thing nobody mentioned, if you get SSDI for 24 months you automatically qualify for Medicare even if your not 65!!! that was a HUGE help for me with medical bills.

I DON'T UNDERSTAND WHY THIS IS ALL SO COMPLICATED!!! I've been on SSDI for 3 years and I STILL don't understand half the rules. Every time I call SSA I get different answers. It's like they WANT us to fail!!! My private disability company kept demanding forms and threatening to cut me off if I didn't apply for SSDI fast enough. The whole system is DESIGNED to make sick people jump through impossible hoops!!!

Thank you everyone for all this helpful information! I just pulled out my policy and you're right - there's definitely an offset clause, and I would need to pay back from any backpay. I'm going to start gathering all my medical records and look into getting legal help before applying. The Medicare info is also really helpful - I had no idea about that benefit. This is all making me nervous but at least I understand the process better now.

Just wanted to add something that might help - when you're gathering medical records, make sure to get records from ALL your healthcare providers, not just your primary doctor. This includes specialists, physical therapists, mental health providers if applicable, and even emergency room visits. SSA wants to see the complete picture of how your condition affects your daily life and work capacity. Also, ask your doctors to be specific about your functional limitations in their notes. Vague statements like "patient has pain" don't help as much as detailed descriptions like "patient cannot sit for more than 30 minutes without severe pain" or "patient cannot lift more than 10 pounds due to back injury." The more specific functional limitations are documented, the stronger your case will be. Good luck with your application - it sounds like you're being smart about preparing thoroughly!

One thing I haven't seen mentioned yet is timing - since you've been on LTD for 8 months already, you actually have some flexibility in when you apply for SSDI. While your LTD policy probably requires you to apply, most give you a reasonable timeframe (usually within 12-24 months of becoming disabled). This gives you time to make sure your medical documentation is rock solid before submitting. Don't rush into applying just because you're worried about the process - a well-documented initial application has a much better chance of approval than a hastily prepared one that gets denied and has to go through appeals. Also, keep in mind that SSDI has a "closed period" option if you think you might eventually return to work. This lets you claim benefits for a specific time period when you were disabled, rather than claiming ongoing disability. Given that you're dealing with accident injuries that might heal over time, this could be worth discussing with a disability attorney.