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Post-Disability Earnings Archives

Post-Disability Earnings - Profit Distribution or Income?

Two recent cases looked at monies paid to disability insurance claimants after the onset of disability and analyzed the question of whether the monies constituted income or profit distributions.  Although the claimants lost in both Fine v. Sun Life Assur. Co. of Canada, 2015 WL 1534513 (E.D. Va. April 6, 2015)and in Bencivenga v. Unum Life Ins. Co. of Am., 2015 WL 1439697 (E.D. Mich. March 27, 2015), the issue is one that frequently emerges but has yet to be definitively resolved.  Fine was the owner of a company prior to the onset of his disability and claimed that post-disability payments represented a distribution of the company's profits.  However, an agreement reached between the former owner and the company delineated the payments as income for ongoing consulting work.  In Bencivenga, the claimant was the owner of an insurance brokerage; and the court found that renewal commission payments received by the brokerage constituted earnings.

DeBofsky, Sherman & Casciari, PC