Can I Collect Unemployment While Waiting for Social Security Disability?

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 you're 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.

Receiving benefits from one of the programs (Social Security or your state unemployment agency) often disqualifies you from the other.

Disability vs. Unemployment Claims

When you file for SSDI benefits 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 a year or you expect you'll be unable to work for at least a year. But when you file for unemployment benefits, you're stating you're ready and available to perform work if you can find a job that fits your work skills. Some states, including Texas and Georgia, 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 that some administrative law judges (ALJs) who work for Social Security look suspiciously at people applying for both benefits at the same time. 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 able to do some work but be legitimately entitled to disability benefits due to Social Security's "grid rules" for older people.

For instance, let's consider a 55-year-old person who is limited to desk work because of a severe spine condition. The Social Security Administration (SSA) will give the applicant a "sedentary RFC." But assume the applicant has always done heavy labor and doesn't have any desk job skills. According to Social Security's rules, because of their age, RFC, and lack of past job skills, they aren't expected to learn how to do a sedentary job, so they should be approved for disability benefits.

In this case, the applicant could probably do some sedentary work, and could collect disability benefits as long as they were to earn under the SGA limit or the SSI limit). So if this applicant doesn't work and 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. In many states, you can receive unemployment benefits even if you're only available for part-time work. So someone seeking SSDI or SSI can apply for unemployment benefits if they feel that they might be able to hold down a part-time job that earns less than about $1,400 per month. In applying for unemployment, they aren't stating that they're able to hold down a full-time job. They're merely claiming that, while they seek out job alternatives, they need unemployment benefits to compensate for not having full employment. (But note that in some states, you can't collect unemployment if you can do part-time work.)

What Does the SSA Say?

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

Nevertheless, a disability claims examiner or judge can count filing for unemployment as one of the factors in considering whether an applicant is disabled. For instance, if a disability applicant is collecting unemployment benefits and has told the state employment department that they've applied for certain jobs, a claims examiner can consider what type of jobs the applicant applied for. 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 unemployment agency can 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).

Getting Legal Help

Many disability applicants won't apply for disability benefits until their unemployment benefits end. But you could lose months of disability benefits by doing this. To protect yourself and make the best decision for your situation, consider talking 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.

Getting Financial Help

Waiting for SSDI or SSI benefits can cause real financial hardship. Find out about resources available to you from the federal government. For instance, you might be able to qualify for food stamps, cash benefits, or assistance paying for heat and utilities. The Supplemental Nutrition Assistance Program (SNAP) is the food stamp program for people with low income. The Temporary Assistance for Needy Families (TANF) program provides financial assistance to families with low income, for a limited time period. The Low Income Home Energy Assistance Program (LIHEAP) program helps customers with low income to pay their utility bills. Your local Department of Social Services (DSS) should be able to help you get connected to different assistance programs in your area.

Learn more about the financial assistance you might be able to receive while you're waiting to get approved for disability benefits.