Disability benefits may be offered through four primary sources, depending on the circumstances. They may be offered through workers' comp, through Social Security, through a state government, or through a private insurer. Let's look at which if these programs cover temporary disability, and then we can discuss the difference between temporary disability and permanent disability.
Social Security does not offer temporary disability benefits. To get Social Security disability, you need to be disabled for at least one year, or have an illness that is expected to end in death. If you are approved for Social Security benefits, you can continue to receive those until your condition improves, you pass away, or you reach full retirement age and become eligible for retirement benefits.
Only five states have a temporary disability insurance (TDI) program:
- New York
- New Jersey
- Rhode Island, and
In these states, you can get paid disability benefits if you can't work for less than a year.
Some private insurers offer short-term disability insurance policies. These usually cover a portion of your salary for up to six month while you recover from an accident or illness.
Much more common are long-term disability (LTD) insurance policies, offered by private insurers, but usually as part of a group plan through an employer. These policies usually have a waiting period of at least 90 days, during which you won't receive any insurance benefits. Some, but not all, LTD policies will pay you benefits for as long as you are disabled. Others are limited to five or ten year periods.
Finally, workers' comp pays both permanent and temporary disability benefits. Temporary disability benefits are paid while you recovering from an illness or injury, and in most states can last up to two years. When your doctor says that your recovery has plateaued (meaning you aren't expected to get significantly better, even with continuing treatment), your temporary disability benefits will end. At that point, if you have any lingering impairments that affect your ability to work, you should receive permanent disability benefits. Most states require workers' compensation insurers to pay temporary disability benefits at a higher rate (2/3 of your average weekly wage before your injury) than they pay permanent disability benefits.