By Fred Fleming, Disability Attorney
There are a number of overlapping terms having to do with disability, resulting in a great deal of confusion over the meaning of the terms short-term disability, temporary disability, long-term disability, and permanent disability. Part of the confusion is that these terms are used within different areas of law that determine disability: worker’s compensation laws, federal Social Security disability laws, state disability laws, private short and long-term disability insurance contracts, and law governing veterans benefits.
If an individual’s disability is expected to last a period of a least a year, the individual can apply for Social Security disability insurance (SSDI) benefits (one has to have paid into this program through a payroll tax). This federal benefit is a type of long-term disability or permanent disability benefit (although Social Security doesn't use those terms).
If an individual is injured at work, temporary disability payments are made until the individual’s condition has stabilized. Once the condition has stabilized, the individual is eligible for permanent disability payments, whether the individual has a slight or severe permanent impairment. These are terms used in the workers' comp system.
To add to this confusion, many companies provide group short and long-term disability insurance policies to their employees. The insurance policies provide monetary benefits if people become disabled. When the term "long-term disability" (LTD) is used, it's usually referring to these private insurance benefits.
Federal law also provides benefits to veterans who have been injured physically or mentally in the armed forces. These are referred to as veteran service-connected disability benefits, which are often permanent benefits.
Finally, under California law, state disability benefits can be provided to individuals who are either physically or mentally unable to work (again, one has to have paid into this program through a payroll tax). This state disability benefit is referred to as short-term disability (SDI) or temporary disability (TDI). Several other states have similar programs: New Jersey, New York, Rhode Island, and Hawaii.
Individuals may be eligible for more than one disability program. If an individual suffers a serious injury at work and will be out of work for a period of at least a year, the individual can be eligible for worker’s compensation temporary disability benefits, worker’s compensation permanent disability benefits, Social Security disability benefits, and short or long-term disability insurance benefits (if the individual's employer provided this insurance to its employees).
Likewise, a cancer victim would be eligible for state disability (short-term disability) benefits, Social Security disability (long-term) benefits, and possibly short-term or long-term disability coverage through his or her employer’s group insurance contract.
A veteran who has suffered an injury in service and can no longer work may be eligible for veteran service-connected disability compensation (long-term), state disability benefits (short-term), Social Security disability benefits, and possibly group short-term and long-term disability benefits if provided by an employer.
When there are overlapping benefits, "offsets" are usually applied to one or more of the benefits. For example, if an individual is eligible for worker’s compensation and Social Security disability benefits, the Social Security benefits may be reduced by the worker’s compensation benefits, or vice versa, depending on the state.
Group short-term and long-term disability insurance policies provide that Social Security payments will reduce the amounts that the insurance company has to pay, as do workers' compensation payments and other payments.
On the other hand, a disabled veteran who is receiving service-connected disability payments may collect all Social Security disability payments without any reductions.
Getting approved for one type of disability benefit can support getting benefits from another program. For example, an individual who is receiving Social Security disability benefits has a good argument that he or she should be approved for group long-term disability benefits. Specifically, if the Social Security Administration determines an individual cannot work, it would be difficult for an insurance company to argue otherwise. Conversely, if the Social Security Administration determines there has been medical improvement in the individual’s condition and ceased disability benefits, a long-term insurance company would have a legitimate argument that benefits should be terminated under its policy as well.
Likewise, a veteran who has a high service-connected rating for post-traumatic stress disorder has a strong argument that he or she should be granted disability under the Social Security disability system. However, Social Security and LTD insurance policies define disability differently, so an award of VA service-connected compensation doesn't guarantee an approval for Social Security disability. That said, Social Security must give some weight to a VA finding of disability, and should give substantial weight to a VA finding that an individual is 100% disabled or totally disabled due to being unemployable.
Not all “long-term” disability benefits last forever. Many cases are reviewed periodically in order to evaluate if the individual's medical condition has improved. If the agency or insurance company determines that the individual’s condition has improved, the benefits can be terminated or reduced.
Virtually all Social Security disability recipients are reviewed periodically. If the Social Security Administration determines there has been a medical improvement in the individual’s condition related to his or her ability to work, Social Security may attempt to terminate the benefits. Social Security recipients in this position are entitled to present evidence that they are still disabled and unable to work in an effort to maintain their benefits.
Insurance companies routinely review benefits under group long-term disability policies to determine if individuals are still disabled under policy terms. The Department of Veterans Affairs (VA) has similar reviews for its service-connected compensation benefits.
Confusion regarding the terms short-term disability, temporary disability, long-term disability and permanent disability can be resolved only by an accurate understanding of the facts of a situation and the applicable laws. If you're unsure of which terms and benefits apply to your situation, arrange for a consultation with an attorney who has experience in worker’s compensation, Social Security disability, group disability insurance or veterans benefits.