Disability and Unemployment

When a person files for disability benefits, that means he or she either has not worked or expects not to work in at least a 12 month period. When that same person files for unemployment benefits, that means he or she is willing and able to work at any time, should a job arise that fits their skills and abilities. As you can see, this could potentially create a conflict of claims in the eyes of a disability adjudicator or Administrative Law Judge (ALJ).

Filing for unemployment benefits alone does not mean a disability applicant will automatically be turned down, however. SSA looks at the “whole picture” of a person filing for disability, and because every case is different, there are circumstances that would explain why a person has filed for both types of benefits. On August 9^th, 2010, Chief ALJ Frank A. Cristaudo sent a memorandum to ALJs across the nation regarding this issue. In part, ALJ Cristaudo stated:

…the Supreme Court held, in a unanimous decision, that a claim for Social Security disability benefits is often consistent with a claim for relief under the Americans With Disabilities Act (ADA) even though there must be an ability to work in order to obtain relief under ADA. The Court noted that, under the presumptions embodied in our five-step sequential evaluation process, a person can qualify for Social Security disability benefits even though he or she remains capable of performing some work. Similar logic applies to applications for unemployment benefits.

In addition, it is often uncertain as to whether we will find a person who applies for unemployment benefits ultimately to be disabled under our rules, and our decision-making process can be quite lengthy. Therefore, it is SSA’s position that individuals need not choose between applying for unemployment insurance and Social Security disability benefits.

Sometimes disability benefits are granted to people who are not only still able to work, but are in fact still working. For example, an older claimant is reduced to being able to perform only sedentary work. However, due to his age, skill set and education, he is not expected to be able to obtain such a job; therefore the granting of benefits is warranted.

Theoretically, the claimant could actually collect disability benefits and still work a sedentary job, as long as his earnings stay well below Substantial Gainful Activity (SGA) limits and it is not full-time (40 hours per week or more). He would also have to make sure his earnings don’t interfere with any SSI payments due to him. SSI recipients are allowed no more than $2,000 in their collective bank accounts, one vehicle and one residence.

Along those same lines, that same claimant could apply for unemployment benefits, while collecting disability benefits, if he says he is willing and able to work a sedentary job. He can potentially collect unemployment benefits until he finds a part-time, sedentary job, which he must actively seek in order to receive the benefits.

However, filing for unemployment can also potentially be used against you. As mentioned previously, filing for unemployment benefits alone does not prevent someone from receiving disability benefits, but SSA can count the unemployment filing as one of the factors in considering whether or not the claimant is disabled. For example, if a claimant applies for jobs that are physically demanding, but tells SSA he cannot do these types of jobs due to his disability, SSA can take that into account and may view the claimant’s statements as less credible.

The rules for unemployment are different for each state. Some states will even make an applicant pay the benefits back if it is discovered that he was ineligible for them at the time of receipt. Since it can be a difficult decision to make, talking the situation over with a disability attorney can help a claimant decide the best course of action, as well as the timing of both filings, if necessary.

Written by Anna Westfall & edited by Attorney Andrew November


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