How Unemployment Compensation Affects your Disability Claim

Who is eligible for unemployment compensation?

Eligibility for Unemployment Insurance requires that you be unemployed, or working hours that have been substantially reduced, through no fault of your own. To continue receiving unemployment benefits, you must prove you are actively looking for suitable employment (employment with duties within your limitations and set of skills) and be ready and able to work if you are offered employment.

Why would the Social Security Administration care?

When you apply for disability benefits through the Social Security Administration (SSA), you are claiming that a severe physical disorder, mental disorder, or both prevent you from sustaining any full time work for a year or longer. If you are receiving other public benefits by stating that you are ready and able to work, then this clearly is a conflict. Your age determines just how much of a conflict this would create.

If you are between the ages of 18 and 49 years old, you must be unable to engage in any full time employment in the national economy for a year or longer to qualify for SSA disability benefits. If you’ve been a carpenter your whole life and now are unable to do that type of work, the SSA expects you to adjust to other work. If you are applying for disability benefits, you are stating that there is no work in the national economy that you can do because of your medical condition(s). If you are collecting unemployment compensation, you are stating that you are ready and able to engage in work if it is offered to you. This can be seen as fraud and damage your credibility in your disability claim. In some cases, it may be possible to collect unemployment benefits for a part-time job that you lost, and continue to search for another part-time job.

If you are 50 years of age or older, receiving unemployment compensation while pursuing disability benefits may not be a conflict. SSA has special rules for older workers and takes past work into consideration (see Age, Education and Training). However, this can still be controversial, and depending on the judge, could still damage your credibility because you are still stating that you are ready and able to work.

What problems may arise once I am approved?

If your application for SSA disability benefits is approved, you may be expected to pay back your unemployment benefits if you are approved for disability for the same time period. Or, the judge may specify that your disability benefits do not start until after your unemployment benefits have ended. Or, your unemployment benefits may not impact your claim at all.

How do I know how my unemployment compensation will affect my case?

Ultimately, unemployment compensation will affect each case differently depending on your age, past work experience, and the judge. It is not possible to predict the outcome, but ask your representative for more information on how your unemployment compensation may affect your case.