Can accrued vacation time be used as an offset when medically retiring from the federal government?
The answer will be found in the LTD plan document. You would need to review it or have a lawyer do so. But, generally speaking, yes, and income from the employer, including accrued vacation could be an offset under a group disability policy.
David Brannen
Disability Lawyer with Resolute Legal
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I consulted with our lawyer and he looked over the policy. It only stated lump sum payments from an annuity. There is nothing in the policy about using accrued vacation time as an offset. The vacation payout is time that I have already earned while employed. The payout is also past income and not ongoing income. The vacation payout is also separate from my pension. Is this likely then that it would not be looked at as offset?
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If you accrued/earned the vacation time prior to going on LTD, then your LTD insurance company can’t use it as an offset regardless of when it is paid out. This coming directly from my major LTD insurer. That said, some policies may have some uncommon but clear wording that allows them to do so.
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