Many residents of Austin are eligible to receive long-term insurance benefits under the Texas Income Protection Plan (TIPP). Generally, these benefits will cover up to 60% of a person’s salary or wages. Many people who receive long term TIPP benefits are also eligible for disability benefits under the Social Security Disability Insurance plan. Both plans provide an important source of income for injured and disabled persons, but a person cannot determine his or her benefits simply by adding the TIPP benefits to the SSDI benefits. The TIPP plan contains a coordination of benefits provision that requires payments under TIPP to be reduced if the beneficiary is also receiving disability benefits from another source. SSDI is “another source” within the meaning of the TIPP regulations.
The basic rule
SSDI benefits do not become payable until the Social Security Administration (SSA) approves an application for benefits. This process can take more than a year if it involves the SSA’s appeals process. (Most initial SSDI applications are rejected, thus virtually guaranteeing that an appeal will be required.) The eligibility requirements for the two plans are also slightly different. SSDI benefits will only be awarded to a person who proves that he or she is completely disabled. The SSA regulations define “total disability” as an illness or injury that will prevent the applicant from working or will result in the applicant’s death within one year. The TIPP regulations state only that a person must be certified as “totally disabled” by a licensed physician. The applicant must also go through a waiting period that is 180 days long. A TIPP applicant must also use all his or her sick leave before payments will commence.
How benefits are integrated
Seventy percent of an applicant’s monthly payment from TIPP is subtracted from the applicant’s monthly salary, not to exceed $5,000. The applicant’s benefits from other disability insurance plans, including SSDI, are then subtracted from the adjusted monthly salary to produce the monthly TIPP benefit.
Payments under TIPP are limited to 12 months if the applicant became disabled at age 69 or older. Payments are also limited to a period of 24 months if the disability is due to nervous and mental conditions unless the applicant is totally disabled, under the regular care of an approved health care provider and confined in a hospital or similar institution that specializes in the treatment of the applicant’s mental disorder. SSDI regulations contain no such limitation. Payments under TIPP are limited to 24 months if the disability was caused by alcohol, drug, or substance abuse and addiction.
As can be seen, the process of coordinating disability benefits under TIPP can be quite complex. An attorney who is knowledgeable about the TIPP and SSDI application processes can offer very helpful advice.