Unemployment Compensation And Social Security Benefits - Expanded

Summary: Even though receipt of unemployment benefits is not supposed to affect your eligibility for Social Security Disability benefits, individual judges may not follow this policy. As such, if you are it is vital to contact our firm before applying for unemployment benefits.

Many clients work as long as they can, even with existing medical conditions and limitations. Then they get laid off, or the company downsizes and they are first to lose their job. And, while we all know how long it takes from the time a claimant files a claim for Social Security until there is a hearing and decision, most clients do not have the financial resources to last two to three years with no income. To keep their home, to pay their bills and to just try to survive, they file for unemployment insurance benefits (UIB).

SSA official policy on receipt of UIB seems pretty clear:

This is a reminder that the receipt of unemployment insurance benefits does not preclude the receipt of Social Security benefits. The receipt of unemployment benefits is only one of many factors that must be considered in determining whether the claimant is disabled. See 20 CFR 404.1512(b) and 416.912(b).

See, Memorandum from Chief ALJ Frank A. Cristaudo: Receipt of Unemployment Insurance Benefits by Claimant Applying for Disability Benefits - INFORMATION (November 15, 2006). Click here for a copy.

Official policy is supposed to be that receiving UIB does not preclude receipt of Social Security or SSI benefits. ALJ Cristaudo's memo reaffirms SSA policy as stated in Social Security Ruling (SSR) 00-1c, which was issued to adopt the Supreme Court's decision in Cleveland v. Policy Management Systems Corp., 526 U.S. 795 (1999). That case said that people can obtain SSDI while obtaining relief under the Americans for Disabilities Act (ADA) which, like UIB, requires the ability to perform some work. In his informational memorandum, ALJ Cristaudo attempted to remind SSA ALJs and employees that, as UIB are similar to ADA benefits, the same policy should apply to applications for unemployment benefits. That position was subsequently affirmed by ALJ Cristaudo in a 2010 memorandum.

See, Memorandum from Chief ALJ Frank A. Cristaudo: Receipt of Unemployment Insurance Benefits by Claimant Applying for Disability Benefits - REMINDER (August 9, 2010). Click here for a copy.

In fact, especially for your client over age 50, opposite results are entirely possible. A 50-year-old person with a high school education and unskilled work experience (or with no transferable skills) who cannot return to his or her past relevant work and who is limited to sedentary work is "disabled" under the Social Security rules, called medical-vocational guidelines or "grids." (See Grid Rule 201.12 and 201.14.) And for a similar 55-year-old client, the person is disabled even if he or she is able to do light work. (See Grid Rule 202.04 and 202.06.) So, a client can be totally honest in claiming he or she is disabled while claiming he or she can do some work.

So, what SSA is supposed to do is look at the totality of the circumstances in evaluating whether or not you are disabled, including but not limited to your medical conditions, treating source records, past work history, earnings and receipt of unemployment compensation. A client can expect many or all of the following questions:

  • Have you applied for unemployment compensation benefits?
  • How long have you been receiving unemployment compensation benefits?
  • Have you been looking for work?
    • (Note - looking is not the same as applying or attempting to work)
  • Have you applied for any part-time or full-time jobs?
  • Have you had any job interviews?
  • Have you been offered any jobs?
    • (If yes, describe them)
  • Are the jobs that you have applied for classified as high stress or fast pace?
  • Do you really think you could actually do the job (not just "I would try")?
  • Are any of the jobs you have applied for similar to your past jobs?

Some ALJs are pretty clear - they believe that if you are receiving unemployment compensation then you think that you can work, and this conflicts with a claim for disability. An amended onset date, coinciding with the date UIB ended, is not unusual. The bottom line is: Receiving unemployment compensation benefits will not automatically disqualify you from receiving Social Security Disability benefits, but it can and will be used against you.

Also remember that if your are awarded benefits, receiving unemployment compensation benefits will also affect whether you can qualify for Supplemental Security Income (SSI). SSI payments are need-based for persons with little or no income. If a person receives unemployment compensation benefits, he or she may have excessive income and can be ineligible for SSI depending upon the monthly amount. Of course, no such offset applies to Title II disability claims. You may want to discuss with your local UIB compensation office whether you have any obligation to repay any of the UIB benefits received while your Social Security claim was pending.

Contact The Firm

Call 614-678-7199 or contact us online for a free initial consultation.