Is It ‘Okay’ to Receive Unemployment Benefits After Applying for Social Security Disability?


By Paul L. Jenkins, Esq.

In recent months, our country has seen historic levels of job loss amidst a raging pandemic, which has threatened the economic security of working-class Americans in ways not seen since the Great Depression. For some, losing their jobs is just the beginning, and calling social security disability attorneys might be higher up on the To-Do List than anticipated.

Most Have It Bad, Some Have It Worse

Americans who already have chronic and progressive health conditions, like lupus, multiple sclerosis, and diabetic neuropathy to name a few, may find themselves out of a job today and worse off medically tomorrow, without steady access to health insurance, regular check-ups, and prescription medications. It’s therefore not uncommon for people to lose their jobs and eventually apply for both Unemployment Insurance and Social Security Disability.

The receipt of Unemployment Insurance benefits does not result in reductions to Social Security retirement or disability benefits. However, what are the pitfalls of having received unemployment benefits before the Social Security Administration decides whether one is eligible for disability?

Social Security Disability Attorneys Break Down SSDI Background and Its Relationship with Unemployment

As a bit of context, the Social Security Disability claims process is a long and winding road. With few exceptions, most Claimants do not get favorable decisions without waiting approximately two years for a hearing date before a U.S. Administrative Law Judge (ALJ). Even then, according to Social Security’s own statistics, only about 45% of Claimants actually succeed. That number is far greater, by the way, with highly skilled social security disability attorneys by one’s side.

At hearing, the experienced social security disability attorneys will know how to shape the presentation of hundreds, if not thousands, of pages of relevant medical evidence alongside sworn testimony of how the Claimant’s medical conditions interfere with daily life and prevent the performance of “substantial gainful activity,” a legal term of art under the Social Security Act that could itself be the subject of lengthy discussion.

At bottom, “substantial gainful activity” translates to “work,” and a judge will generally want to account for all medical evidence and testimony before determining whether a particular claimant can or cannot sustain an 8-hour workday, five days a week in a competitive work environment.

In addition, any and all income earned during the pendency of a disability claim will be carefully scrutinized by the presiding ALJ and factored into an eligibility decision. For this reason, a quarterly itemization of all taxed income during the pendency of a disability claim—including W-2 employment, self-employment, third-party insurance proceeds, or unemployment benefits—will be automatically associated with a person’s Social Security Disability “exhibit file.” Your social security disability attorneys will be able to help guide you through this part of the process.

With Unemployment Insurance, in particular, an apparent conflict arises because the person whose disability application is pending has, on the one hand, expressly informed Social Security that they cannot “work,” but on the other hand has expressly informed their state Department of Labor that they can “work” and are in fact capable of conducting a diligent job search. On its face, this conflict might seem irreconcilable. However, the reality is that Unemployment Insurance and Social Security Disability Insurance define the word “work” quite differently and they each serve very distinct functions.

The former is a regulatory scheme designed to facilitate a person’s return to the workforce, even to the extent that work is part-time and / or dependent on specific accommodations. The latter is a regulatory scheme designed to determine whether a person can perform competitive employment without the need for any accommodations at all. If you are unclear as to the language in your documentation, consult with knowledgeable social security disability attorneys to be sure you are all on the same page.

As a reminder to all ALJs that a Claimant’s ability to perform “accommodated work” of any kind is not an appropriate basis to deny Social Security Disability benefits, the Agency’s former Chief ALJ issued a 2006 Memorandum which made clear that people can obtain Social Security Disability while also obtaining relief under the Americans with Disabilities Act (ADA). And much like Unemployment Insurance, the ADA presumes the ability to perform some type of work. This Memorandum not only reinforced Social Security’s longstanding policies for evaluating the meaning of “substantial gainful activity,” but also affirmed Supreme Court precedent. Social Security Ruling 00-1c, Cleveland v. Policy Management Systems Corp., 526 U.S. 795 (1999).

Notwithstanding a matter of settled law, it’s still easy to see how an individual ALJ might view the receipt of both Unemployment Insurance and Social Security Disability as a seemingly contradictory “double-dip.” Even to the extent that an individual ALJ fairly assesses the issue of one’s receipt of unemployment benefits, it should not be overlooked that this can legitimately damage one’s case as part of a larger credibility analysis of the Claimant’s true physical and mental abilities. Roberts v. Astrue, Civil Action No. 10-10664-PBS (D. Mass. Jul. 27, 2011).

Should I Call Social Security Disability Attorneys to Help Me?

A person with a pending Social Security Disability claim, who has also received unemployment benefits while their disability claim is pending, would be well advised to immediately consult with one of our firm’s highly trained social security disability attorneys. This particular issue will need to be carefully navigated to ensure it does not pose an outsized barrier to benefit entitlement.

When facing social security or disability benefits issues and / or unemployment struggles, don’t hesitate to pull out the Big Guns! The social security disability attorneys at Morrison & Hughes are here to help, just call (404) 689-2734 or click to schedule a free consultation.

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