Can I Collect Unemployment While Waiting for Social Security Disability?

Social Security doesn't have a rule against it, but collecting unemployment while waiting for SSDI or SSI disability benefits could come back to bite you. Learn why here.

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Filing for Social Security disability benefits while you're still receiving unemployment compensation can be a tricky situation. The problem with filing for disability while on unemployment is that you're claiming two different circumstances: 1) you're ready and able to work but simply can't find employment that suits you, and 2) you're unable to work due to a medical condition.

Disability vs. Unemployment Claims

When you file for SSDI or SSI disability benefits, you're stating that, due to a physical and/or mental impairment, either you've been unable to perform substantial work activity for 12 months or you expect you'll be unable to work for at least 12 months. But when filing for unemployment benefits, you're stating you are ready and available to perform work if you can find a job that fits your work skills. Some states even require that you're ready and able to perform full-time work to be eligible to collect unemployment benefits.

Collecting Disability and Unemployment Benefits at the Same Time

Whether you should try to collect unemployment and disability benefits at the same time is a controversial issue in the disability field. Lawyers, nonlawyer advocates, Social Security claims examiners, and administrative law judges (ALJs) all have opinions.

What Do Disability Experts Advise?

Many Social Security disability lawyers advise against collecting unemployment benefits when applying for Social Security disability. One reason is that they know how many administrative law judges (ALJs) who work for Social Security look at people applying for both benefits at the same time: suspiciously. Some judges will outright deny the disability claims of any applicants who are collecting unemployment benefits.

Other disability advocates point out that there are situations where an older person could be legitimately entitled to disability benefits due to a "medical-vocational allowance" even though they are able to do some work.

For instance, let's consider a 55-year-old person who has been limited to desk work because of a severe spine condition. Social Security will give them a "sedentary RFC." But assume this person has always done heavy labor and doesn't have any desk job skills. According to Social Security's rules, because of their age, past job skills, and education, they aren't expected to learn how to do a sedentary job, so they should be approved for disability benefits. In that case, the individual can collect disability benefits, but could actually do some sedentary work (as long as they make under the SGA limit or the SSI limit). So if this person collects unemployment compensation while they wait for a disability decision, there's no real conflict because they are, at least in a sense, ready and able to work.

Here's another situation where looking for work and waiting for a disability decision doesn't break any rules. Someone seeking SSDI or SSI can apply for unemployment benefits if they feel that they may be able to hold down a part-time job that earns less than $1,300 per month. In applying, they aren't stating that they're able to hold down a full-time job, but they're also not stating that they're unwilling to seek employment. They're merely claiming that 1) their disability may prevent them from working full time, and 2) while they seek out job alternatives, they need unemployment benefits to compensate for not having full employment.

What Does the SSA Say?

Here's the official stance of the Social Security Administration (SSA): Receiving unemployment compensation doesn't prevent someone from getting approved for Social Security disability benefits.

Nevertheless, a disability claims examiner or ALJ can count filing for unemployment 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 they've applied for certain jobs, a claims examiner can take into account what those jobs were. If the jobs required physical labor that the applicant claims they can't do, Social Security can consider that inconsistency when making a disability decision.

Unemployment and Disability: Consider the Risk of Double Dipping

The decision to file for disability is yours, but you need to consider the potential pitfalls of taking unemployment benefits while you wait for a disability decision. In some states, you might have to repay unemployment benefits you weren't eligible for, if Social Security later finds you were disabled during a period you collected those unemployment benefits.

Another thing to remember is that only those who are actively seeking work are entitled to unemployment benefits. If your state unemployment agency finds you aren't genuinely trying to find work but are instead just trying to draw a check while you wait for disability benefits, you have a problem. The agency will stop your unemployment payments and force you to pay back any money you received.

In some rare cases, people can even be charged with fraud. For example, if you're between the ages of 18 and 49, you're considered a "younger individual" in Social Security's eyes, and you must be unable to perform any type of work whatsoever in order to be found disabled. But if you're collecting unemployment benefits, you're stating that you do believe there's work out there you can do. This conflict can be seen as fraud and can, for one, damage your credibility in your disability claim.

More importantly, both the federal government and states take fraud claims very seriously. If you're found to have been intentionally fraudulent in statements you've made to the SSA or to your state's unemployment agency, you could end up with a criminal conviction (and possibly in jail).

Getting Legal Help

To protect yourself and make the best decision for your situation, it makes sense to talk to a disability lawyer about whether to file for both disability and unemployment benefits, and how to manage the timing of both filings.

If you do get approved for disability benefits while you're on unemployment, you should call the unemployment department and ask them to stop your unemployment benefits.

Updated November 18, 2021

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