Social Security Disability and Unemployment Insurance

Can an applicant apply for Social Security Disability while collecting Unemployment Insurance?

The problem with filing for disability while collecting unemployment is that you are asserting that you can work to one agency, while saying you cannot work to another. This creates a tricky situation!

Disability v. Unemployment Claims

If you apply for Social Security disability benefits, you are stating that you have been unable to perform substantial work for 12 months, or that you anticipate that you will be unable to perform substantial work activity for at least 12 months, due to a severe mental and/or physical impairment.

When filing for unemployment, however, you are stating that you are ready and available to perform full-time work should you be able to find a job that meets your job skills.

What is the Risk?

Social Security’s official stance is that receiving unemployment benefits does not necessarily prevent someone from receiving Social Security disability benefits, but that a disability claims examiner or ALJ can count the unemployment filing as one of the factors in considering whether an applicant is disabled.

For instance, if a worker is collecting unemployment benefits and telling the state employment department that she has applied for certain jobs, the ALJ can take into account what those jobs were. If they were jobs requiring physical labor that the applicant claims she cannot do, Social Security can take that into account and deny the claim.

You may also be required to pay back all unemployment insurance benefits received during your application and/or appeal process.

In some instances, the Department of Labor may investigate the unemployment claim for fraud. If an applicant is approved for disability benefits, they need to request that their unemployment benefits be stopped immediately.

Advice for Advocates

Always advise applicants that filing for disability while collecting unemployment is their choice, but they need to consider the potential pitfalls of taking unemployment benefits while they wait for a disability decisions.