Does a private long-term disability policy reduce SSDI payments in New Jersey?
By Hogan Smith
Updated 12/19/2025
Does a private long-term disability policy reduce SSDI payments in New Jersey? In New Jersey, having a private long-term disability (LTD) policy typically does not directly reduce your Social Security Disability Insurance (SSDI) benefits. However, the amount you receive from SSDI may be affected indirectly because some private policies offset benefits by the amount you get from other disability programs including SSDI. It’s important to understand how your LTD plan coordinates with SSDI to know if your total disability income is adjusted. Generally, SSDI benefits are not reduced by private disability payments, but your LTD insurer might reduce your payments by your SSDI amount.
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Understanding SSDI and Private LTD Policies
Key points to know in New Jersey:
- SSDI benefits are federally managed and generally unaffected by private LTD policy payments.
- Many private LTD policies include offsets that reduce your monthly payment by the SSDI amount.
- Your total monthly income from both sources may be limited but SSDI checks are not cut directly.
How Offsets Work in LTD Policies
Consider the following:
- Your LTD carrier might subtract SSDI payments from the total amount it would otherwise pay you.
- This is to prevent receiving more than your salary in combined benefits.
- Offsets vary by plan, so policy language is critical to determine impact.
Impact on SSDI Eligibility and Payments
Important facts:
- SSDI qualification and payments are based on federal criteria, regardless of private LTD status.
- Receiving LTD benefits does not negatively affect your ability to get SSDI approval.
- Your SSDI amount is set by Social Security Administration (SSA) rules and not lowered due to private insurance.
Coordination of Benefits and Planning
Keep in mind:
- It’s important to coordinate the timing of applying for SSDI and using your LTD benefits.
- Many insurers require you to apply for SSDI to continue receiving full LTD benefits.
- Consult your insurer and a disability expert for optimal benefit management.
Common Misconceptions
Watch out for:
- SSDI payments are not clawed back by private LTD policies in New Jersey.
- Private LTD reductions happen on the LTD side, not Social Security benefit side.
- Confusion between benefit offsets and eligibility is common but important to understand.
How Hogan Smith Can Help
Hogan Smith helps New Jersey residents understand how private LTD policies impact SSDI payments by:
- Reviewing your LTD policy to clarify potential offsets and coordination with SSDI.
- Explaining how to maximize total benefits without risking overpayments or denials.
- Providing advice on applying for SSDI while receiving LTD benefits to ensure compliance with policy terms.
- Representing you in communications with insurers and the SSA to protect your financial interests.
Contact Hogan Smith Today
If you have questions about whether your private long-term disability policy reduces SSDI payments in New Jersey, contact Hogan Smith today for a free consultation. Our knowledgeable team will guide you through how to effectively manage both benefits and protect your disability income.
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