What Are Residual Disability Benefits?

A disability doesn’t have to permanently or totally prevent you from working to affect your finances. Maybe you’re a Philadelphia, Pennsylvania, worker whose disability partially limits their ability to perform work duties.

Losing some ability to work can lead to a reduction in income. Disability benefits may help when your income goes down because an injury or illness affects your earning capacity.

Check the relevant insurance policy to find out if it offers residual disability benefits. A residual disability benefit can help you receive some financial assistance when you can’t earn the same income you’re accustomed to.

The Residual Disability Benefit Definition in Philadelphia, PA

A disability insurance policy may contain a residual disability benefit rider. A residual disability benefit rider applies when a worker is able to perform some work duties. The rider may also apply when a disabled person can perform the same work duties they previously did but for shorter lengths of time.

A partially disabled person may technically be able to work. However, they might not earn as much as they did before becoming disabled.

Residual disability benefits help cover loss of income or earning capacity. These benefits can make up the difference between what a disabled employee previously earned and what they currently earn.

Qualifying for Residual Disability Benefits in PA

The language of a residual disability benefit rider can vary from one policy to another. Thus, so can the terms and conditions of a rider.

For example, many policies require applicants to lose a certain percentage of income before they can qualify for a residual disability benefit. Often, a policy will require a 20 percent drop from pre-injury income before an applicant will qualify.

You may also have to provide documentation showing how a disability limits your ability to work. The insurance company needs to ensure you’re not “gaming the system” to work an easier job without a major income reduction.

Documenting Income Reduction to Qualify for a Residual Disability Benefit

How you document your inability to work and income reduction may depend on the specifics of a policy. Some insurance companies require applicants to follow specific procedures when they receive residual disability benefits. For example, a policy may require someone to regularly provide evidence showing they can’t return to their pre-disability role yet.

Review a policy carefully to ensure you understand what it requires of you. General ways you might document income reduction and reduced earning capacity include:

• Providing pay stubs and other documentation showing the change in your income
• Providing documentation of your work schedule, as you may work fewer hours than you previously did
• Getting a statement from your employer explaining the change in your role
• Providing medical documentation showing why you still can’t work in the same capacity you once did
• Providing statements from witnesses (such as coworkers or family members) who can speak to the nature of your disability

Always follow your doctor’s advice when receiving disability benefits. You may no longer be eligible to receive benefits if you’re not trying to improve your condition.

Residual Disability Benefits and the Qualification Period in Pennsylvania

Applying for long-term disability (LTD) benefits in Pennsylvania usually triggers an “elimination period.” This is a waiting period between when you receive a diagnosis and when you start receiving benefits.

Similarly, when you apply for a residual disability benefit, there may be a “qualification period.” You will need to continue to be disabled during this period before you can begin receiving payments.

How long this period lasts can depend on your policy’s terms. In some cases, the qualification period for residual disability benefits is longer than the elimination period for total disability.

A Note on Proportionate Disability

When checking a disability insurance policy for a residual disability benefit clause, also check for a “proportionate disability” clause. Proportionate disability and residual disability are interchangeable terms in Pennsylvania.

Contact a Philadelphia, Pennsylvania, Disability Benefits Lawyer

Navigating your options when applying for disability benefits can be a confusing process. In addition, understanding the terms of a residual disability benefit rider may prove challenging. Depending on a policy’s language, it might not be clear whether you qualify for a residual disability benefit. Having legal assistance helps in these circumstances.

At Capitan Law, we’re prepared to help you with everything from applying for benefits to appealing a denial. If you’re eligible for a residual disability benefit, we can help you demonstrate this to the insurance company. Learn more about what we can do for you by contacting us online or calling us at (267) 419-7888 for a case review.