1. Can you collect unemployment and apply for Social Security Disability Insurance (“SSDI”)?

We are often asked: “Can I collect unemployment while applying for Social Security disability insurance?”  The short answer is YES, but the road to obtaining SSDI is often two years or more on the long-end and a few months on the short-end.  Due to the long wait and the fact that you are not working, and therefore technically “unemployed”, unemployment benefits are often an attractive option. Although you are unemployed by definition, collecting unemployment benefits while applying for SSDI is somewhere in the gray area of what you should not do.

Unemployment benefits are distributed by the state you reside. In contrast, SSDI is distributed by the federal government. On one hand, when you apply for unemployment benefits you are telling your state government: ‘I am ready, willing, able, and actively seeking employment.’ On the other hand, when you apply for SSDI you are telling the federal government: ‘I am disabled and unable to work.’ In situations where you feel you may be able to work part-time (making less than $1,000/month), applying for SSDI and unemployment may be an option. By filing for both, you are signaling that while you cannot work full-time you need unemployment benefits to make up for the lack of employment while you search for alterative employment opportunities.

Some states require that you seek full-time employment to obtain unemployment benefits. In some instances, if unemployment discovers you are not working due to your disability impairment you may be responsible to pay back all the unemployment benefits.

  1. You are not eligible for SSI benefits if you do NOT apply for all other benefits for which you may be eligible.

If you do not qualify for SSDI because you do not have enough work credits, you may be eligible for SSI. By law, if you are eligible for SSI then you must file for unemployment and any other benefits you may be eligible for. (20 CFR 416.210).

  1. How does the Social Security Administration know if I am collecting unemployment?

Throughout the time your Social Security disability case is pending before the Social Security Administration they run a report called the “NEW HIRE, WAGE, UEMPLOYMENT QUERY (NDNH) QUERRY REPORT.”  This report is broken down by quarter of the year, it tells the Social Security Administration how much money you made in each quarter, the name of the employer, the employers address, the date you were hired, it also tells them if you received unemployment for a quarter and how much unemployment you received.

  1. What questions will I be asked at a Social Security hearing if I received unemployment compensation. Most judges will ask, why did you collect unemployment insurance? What type of jobs you looked for?

We always instruct our clients to tell the truth when answering the judge’s questions. In this situation the truth is pretty easy. First, most claimants make the point that they needed the money to survive. Then they explain that they were looking for jobs that permit them to work with the limitations and restrictions they have from their disabilities. Some judges move the date of disability to the last day that the client collected unemployment, but some judges do not because the client never found a job.