LAW FIRM BLOG
Concurrent Social Security Disability and Unemployment Benefits
June 02, 2020
The Social Security Disability Insurance (SSDI) program pays benefits to workers covered by the Social Security program who are unable to work for at least a year due to a mental or physical impairment. Unemployment benefits, in contrast, are intended to assist those who are willing and able to work, but cannot find a job. These two programs usually serve different groups of people: those incapable of working and those who can and are seeking work.
It is uncommon, although possible, for an individual to receive both benefits. Officially, the Social Security Administration (SSA) states that collecting such unemployment benefits is not a bar to being approved for disability benefits, but rather is a factor that claims examiners and Administrative Law Judges (ALJs) can consider when deciding your disability claim.
Overview of SSDI Benefits
SSDI is a federally-operated SSA program that provides financial assistance to eligible adult workers who cannot work due to a long-term disability. Qualification requires sufficient work history credits with taxes paid into the Social Security system. The definition of “disabled” under the Social Security Act requires that the applicant, age 18 or older, who worked successfully in the past, be unable to engage in any “Substantial Gainful Activity” (SGA) due to a medically determinable impairment, which has lasted or is expected to last for a continuous period of 12 months or longer, or result in death.
In 2020, SGA under SSDI means you must not be able to perform any work that pays more than $1,260 a month. The disability must be severe, preventing or limiting the applicant from basic work-related activities, such as standing, sitting, or concentrating. It must prevent the claimant from engaging in his or her previous work, as well as other kinds of work that exist in significant numbers in the country, considering his or her impairment, age, work experience, education, and other factors.
Overview of Unemployment Benefits
Unemployment benefits refer to financial support provided through a joint federal-state government program administered by each state, with federal guidelines, and paid to eligible workers from state-specific compensation funds. Because unemployment programs are state-based, the eligibility requirements, the amount of payments, and the length of time a beneficiary may receive unemployment benefits are determined by state law.
In general, workers who are unemployed due to layoffs or fired by their employers and who meet the eligibility requirements may receive unemployment benefits, unless their employment was terminated due to misconduct. Those who resign, quit, or voluntarily leave their employment are typically ineligible, unless they did so because of a compelling reason caused by the employer (i.e., harassment, discrimination, hazardous work environment) or by the fact that they now remain incapable of performing that particular job but do remain capable of performing other work. These benefits are in place to temporarily replace lost wages until a person finds another job. While receiving unemployment benefits, you must actively be physically able and willing to work, seeking work, and be ready to work if you get a job offer, though there may be no opportunities available to you. All states require you to be “ready, willing, and able.” Some states require you to seek only full-time employment before they will approve unemployment benefits. Depending on state law, this usually requires regularly submitting documentation of jobs for which you have applied to the state agency.
A person must also meet their state’s requirements for wages earned or time worked during a set “Base Period.” While each state’s base period is slightly different, most require you to have earned a minimum amount in employed wages in the 12 months or so prior to your unemployment.
States also have differing upper limits on the total weekly benefit amount that are based on the average earnings in that state. The benefits are taxable, and any other source of income a person receives while receiving these benefits must be reported to the unemployment agency in their state.
Claiming Both Unemployment and SSDI Benefits Appears Inconsistent
Unable to work due to declining health, individuals with disabilities often confront financial hardships. Many who are filing for SSDI benefits find themselves in the unfortunate position of being unable to continue to earn income with their labor, but unable to speed up the process for collecting income from disability benefits. While a disabled person might immediately file for SSDI benefits, there is a minimum five-month wait period. Due to the vast number of disability applicants, approvals can take up to three years. Unfortunately, the financial responsibilities of life do not stop during difficult times. Some individuals are forced to look for other means of financial assistance such as unemployment benefits as a means of support.
The issue, however, is murky when it comes to applying for SSDI while receiving unemployment benefits. If an individual previously worked full-time but acquired a disability that allows him or her to work only part-time for less than $1,260 a month, he or she may be able to apply for or receive unemployment benefits at the same time as SSDI benefits. According to the SSA, a medically-qualified individual may still receive disability benefits while working, so long as the combination of earned and unearned income doesn't exceed $1,260 per month. Unemployment income counts toward the disability income limits. So technically, it is possible to receive both, though the two programs are not interchangeable and contradict each other.
Social Security Disability is intended for people that are unable to work, while unemployment is intended for those who are capable and willing to work. If you are filing for SSDI, you are stating that you are completely and totally disabled and have been unable, or that you anticipate that you’ll be unable, to perform SGA in the national economy for at least twelve months, due to a mental and/or physical impairment.
But when filing for unemployment benefits, you are stating you are ready, available, willing and able to work, but have simply not been able to find employment that fits your work skills (usually on a full-time basis) and, thus, are temporarily in need of financial assistance until that job is found. (And some states require that you're ready and able to perform full-time work to be eligible to collect unemployment benefits.)
Claiming both disability and unemployment benefits at the same time is unusual, but there are circumstances where pursuing both claims remains appropriate. For example, someone might be receiving unemployment benefits and become disabled after becoming unemployed or became unable to work while they were employed due to an illness or injury on the job. These individuals might apply to both programs but must actively seek work to maintain the unemployment benefit.
In other circumstances, a disabled individual may be incapable of working their former position without significant accommodations to remain so employed. It may be that the employer is incapable of providing such accommodations, but one is continuing to look for work that would allow for such accommodations (i.e., rest breaks, physical accommodations whereby less lifting is required, sit/stand options are provided, the ability to arrive late or leave early).
Similarly, a disabled person may be looking for other types of work that would be within their functional limitations, but which may be too difficult to obtain as it may not exist in significant numbers or may be jobs that the Social Security grid rules would not expect the individual, based on their past education, skill level, functional limitations and age would be hired to do.
Another instance would be if an individual worked full-time but became disabled and is now working only part-time hours, thus earning less than the amount that is considered SGA by the SSA for SSDI benefits. An injured worker may file for and receive unemployment benefits based on the applicable standard of being ready, willing, and able to perform some work and yet still claim and be entitled to SSDI/SSI benefits based upon an inability to perform SGA. The standards used to determine ability to work and disability differ with respect to unemployment and SSDI/SSI claims.
No Law Prohibiting
There is no law stating that you cannot receive for SSDI benefits while receiving unemployment payments. That does not mean, however, that your unemployment benefits will not affect your eligibility for SSDI.
Though the issuance of both benefits to the same person at the same time seems inconsistent with the primary function of each program, and despite recent attempts by Congress to pass legislation preventing claimants from receiving both simultaneously, there is no law prohibiting you from applying for both types of benefits. Multiple bills have been introduced in congress throughout the years that have sought to bar individuals from receiving both simultaneously. Thus far, none of the proposed bills have passed into law (See H.R. 918 & S 499).
In fact, a 1999 U.S. Supreme Court case, Cleveland v. Policy Management Systems Corp., held that anyone who applies for both types of benefits has the right to explain why allocation of both disability and unemployment does not cause a contradiction. The case also suggests that it's possible for an individual to qualify for both types of benefits at the same time. The court held that Social Security disability claims “did not inherently conflict” with other types of benefits and that both types of benefits are appropriate in particular situations. However, it is up to the claimant to prove that their eligibility for unemployment benefits is not in conflict with a disability claim.
At present there is also no offset between SSDI and unemployment, however, there is often a bill before Congress that would result in unemployment benefits received being considered an offset against SSDI benefits or being considered SGA for the period unemployment benefits is awarded.
The SSA officially states that receiving unemployment benefits does not preclude or disqualify an individual from obtaining disability benefits and does not explicitly deny SSDI or SSI claims by those already receiving unemployment benefits. Instead, whether an SSDI applicant receives unemployment benefits is one of many factors considered when determining if he or she is disabled. The SSA claims examiners and ALJs who review the details of your claim will take into consideration that you are receiving unemployment benefits when deciding if you are disabled and often consider your filing for them as an admission that you can work or as an indication that your disability does not prevent you from working. However, they must also take into account the types of jobs you are applying for. For instance, if a worker is collecting unemployment benefits and telling the state employment department that she has applied for certain jobs, the SSA can consider and evaluate what those jobs were. If they were jobs requiring physical labor that the applicant claims she cannot do, they can take that into account.
In addition, unemployment benefits can create an adverse credibility factor for the claims examiner or ALJ that is reviewing the case. If a person is receiving unemployment benefits, and they have claimed to be actively seeking full-time employment, it can indicate that their disabilities may not be as severe as they claimed.
You may be required to report disability benefits. If you are applying for unemployment benefits while receiving social security disability, and the state learns that you are unable to seek employment due to your disability and that you are not physically able to work or be found incapable of working altogether, you may have to pay back to the state all or portions of the amount of unemployment benefits that you have received during the time that the SSA found that the person was disabled. This can result in reduced back pay when a favorable disability ruling is reached or the possibility of owing the state government money if the unemployment funds were more than the back pay from Social Security disability.
If you are found to have been intentionally fraudulent in statements or withheld material information you have made to the SSA or your state’s unemployment agency, this could result in a criminal prosecution. Thus, you want to be sure that you don’t accidentally mislead anyone. You need to show that you can work while being disabled.
What Do Disability Lawyers Advise?
Some lawyers note that there are situations where a person 50 years or older could be legitimately entitled to disability benefits due to a medical-vocational allowance but be able to work. For instance, if a person is limited to sedentary work (that is, was given a sedentary RFC), but because of his age, past job skills, and education level, isn’t expected to learn how to do a sedentary job, he should be approved for disability benefits. In that case, theoretically the individual could actually collect disability benefits but work a sedentary job (as long as he makes under the SGA limit or the SSI limits). (Although if the SSA sees that the individual is working, this could be used as evidence that the worker has the skills to work a sedentary job.) Similarly, an individual could apply for unemployment benefits if he says he is ready and willing to work a sedentary job. (Although, again, the SSA might use this information to say the worker has the skills to work a sedentary job and is not disabled.)
When It Makes Sense to Apply for Disability and Unemployment
If you feel that you may be able to work a part-time job that generates less than $1,260 per month in income, and your state allows you to file for unemployment benefits while seeking part-time work, you may want to apply for both unemployment and SSDI benefits at the same time. In doing so, you are not stating that you are able to work a full-time job, but you are also not stating that you are unwilling to seek employment. You are merely stating that your disability may prevent you from working full-time and obtaining SGA and that you need unemployment benefits to compensate for your lack of employment while you seek out job alternatives.
If, however, you live in a state where you are required to seek full-time work while receiving unemployment benefits, then you should not apply for unemployment while applying for Social Security Disability as your two applications will contradict one another.
Honesty is Key
The essential rule in applying for either of these programs is to be honest. Under no circumstances should a claimant try to hide that he or she is actively pursuing both benefits. Government agencies can, and often do, communicate with one another. Evaluate whether or not you are able to work, to what extent you can work and learn the individual the requirements of both types of benefits and see how your specific circumstances relate to the law in your state. If you are entitled to both benefits you should have no trouble getting them. If, however, you are not entitled to one of these benefits you should avoid applying for both disability and unemployment and choose the benefit that is truly due to you.
What Are The Rules in New York State?
New York state does not require individuals to seek full-time employment to receive unemployment benefits. In fact, you may even work part-time and receive partial benefits if you work less than four days in a week and earn $504 (gross wages) or less.
You are considered employed on any day when you perform any services--even an hour or less--whether or not you are paid for that day. Each day or part of a day of work causes your weekly benefit rate to drop by one-quarter. For example, if your weekly benefit rate is $200 and you work three days and earn less than $504, you may receive $50 in benefits. If you work two days, you may receive $100 in benefits. If you work one day, you may receive $150 in benefits.
If you receive partial benefits, it extends the length of time you may collect benefits. If you earn over $504 in any week, no matter how many days you worked, you cannot receive benefits for that week.
What Disability Judges Really Think About Collecting Unemployment
ALJs, who work for the SSA, usually know when you’re collecting unemployment benefits because the SSA has access to such information and usually includes it in your claims file. Some have been known to look askance at people applying for both benefits at the same time. And an ALJ will certainly take into account the fact that the claimant is stating that they are actively seeking employment, and yet are also too ill to work. Some judges do not like to see that disability applicants are collecting unemployment benefits no matter what the circumstance. Other judges will deny your disability claim only if you received unemployment benefits after you applied for disability benefits, unless you can prove your condition medically worsened since you applied. Some disablity applicants therefore wait to apply for disability benefits until their unemployment benefits ends. Other judges simply will not grant you disability benefits for the time period that you were receiving unemployment benefits and require you to change your onset of disability date (so you will not receive back benefits for the same time period you were collecting unemployment). Still others don’t care even if you’re receiving unemployment benefits at the time of your hearing. These judges realize that people need income to live, and that there is no guarantee that disability benefits will be granted after the long process of applying for them.
At administrative hearings, the ALJ will most likely ask you to answer the contradiction of attempting to collect benefits from both programs. You will have some explaining to do, and chances are you will be unsuccessful at it, meaning you will be denied benefits from one program or the other.
Explanations for Collecting Unemployment Benefits
If you have collected unemployment benefits and you attend an appeal hearing, be prepared to explain why you’re collecting them, or why you collected them recently. The judge may ask what jobs you applied for while you were collecting unemployment (and will be checking if they were similar to your old job). If the jobs were ones that your stated limitations say you aren’t capable of doing (for instance, a job requiring heavy lifting), you may have a problem.
Likewise, if you applied for a full-time desk job but are telling the judge you can’t sustain any full-time work. You could argue that you probably could not have been able to sustain full-time work for more than a few weeks without great pain or other symptoms or without getting fired. As federal judges have stated in the past, “A desire to work does not mean that a claimant can actually work,” and “Receipt of unemployment insurance benefits does not prove ability to work.”
If you have a valid argument that there is no legal conflict between your collecting unemployment and disability benefits, tell the judge. Here are some examples:
• You were applying only for jobs that were within your physical or mental limitations (for example, no heavy work, fast-paced jobs, or high-stress jobs dealing with the public).
• You were applying only for part-time jobs.
• You applied to jobs where you might be able to work if the employer agreed to accommodate your disability by providing special equipment or an aide to help you do your job. For instance, you could work if you could find an employer who would let you miss a lot of work, take frequent breaks to lie down, or work at your own pace. There may be such employers, but finding them is not going to be easy. So you may be capable of working, but a suitable work environment is not available in significant numbers in the national economy.
• You were applying for “light” work, since that’s all you can do, and you’re over 55. In this case, the fact that you can do light work may not hurt your disability claim. Thanks to a special “Grid Rule” for those 55 and older and limited to light work, you can qualify for disability unless:
• you can do your old job
• you have job skills you could use to easily switch to light work, or
• you’ve had recent job training that allows you to do light work.
• You were applying only for jobs less strenuous than you have performed in the past such as sit-down jobs, since that’s all you can do, and you’re over 50. In this case, the fact that you can do sit-down work may not hurt your disability claim. Again, thanks to a grid rule, those 50 and older and limited to sedentary work will be found disabled unless you can perform your old job or had recent job training for sedentary work or have job skills for sedentary work. (Some states, however, don’t pay unemployment benefits to those who say they can only do sedentary work, because they aren’t available in a significant percentage.)
Few Exceptions to the Rule
A 2012 report from the Government Accountability Office showed that fewer than one percent of SSDI beneficiaries also received unemployment insurance benefits at the same time.
Supplemental Security Income Requirements
Even if you can receive unemployment benefits while looking for part-time work, you need to look into how unemployment benefits will affect your SSI application. The SSI program provides benefits to certain aged, blind and disabled people. SSI is designed to provide funds to people with little or no income and few financial resources. SSI and SSDI requirements are the same for the definition of disability. But while there are no monthly income limits set on individuals who receive SSDI, there are for those who receive SSI. When determining your income, the SSA will consider all earned and unearned income, and benefits are reduced by both.
Earned income describes money gained from working at a job or running a business, while unearned income is money received from passive activities, such as dividend and interest income. One-half of earned income and the full amount of unearned income count against SSI benefits. Unemployment benefits are considered unearned income that must be subtracted from monthly SSI benefits. Therefore, if you qualify for SSI, you will only be gaining one benefit to lose another. The government lets SSI recipients keep the first $20 of income gained from any source each month, but every dollar of unemployment benefits gained beyond the first $20 reduces SSI on a dollar for dollar basis. If your unemployment payments cause you to exceed the monthly SSI income limits, you will be denied SSI benefits because of this.
Calculating SSI Benefits
Monthly SSI benefits are based on a basic federal SSI benefit rate of $783 in 2020. Earned and unearned income are subtracted from the benefit rate to calculate monthly benefits. For example, an unemployed worker who is eligible for SSI and receives $500 in unemployment benefits gets $783 minus $480, or $303 a month in SSI benefits. SSI benefits may be increased beyond the basic federal amount by supplements offered by state governments.
How Do Unemployment Benefits Affect SSI?
You are required to be unemployed in order to receive SSI benefits. Unemployment benefits do affect your SSI. Technically, there’s a limit on how much unearned income that you can receive while on SSI. However, your unemployment benefits do not count against the SGA limit. So, you just need to stay beneath the limit of the unearned income limit. In order to ensure that you can keep both, make sure that you monitor any other sources of unearned income.
If you receive worker’s compensation benefits for your disability, most states will not allow you to collect unemployment benefits at the same time. According to a review by the SSA, half of the states reduce unemployment benefits by the worker’s compensation benefits amount each week. Social Security disability does not preclude collecting unemployment at the same time, but it can hamper your ability to receive disability. You are also restricted to 80 percent of your average earnings prior to your disability.